What is a purchase order template? How to create one on Word/Excel?

What is a purchase order template? How to create one on Word/Excel?

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In today's time, many small business owners think that purchase orders can be massive paperwork. They think of this as a time-wasting activity because they are unaware of how it works and why enterprises use it. A purchase order is a document that the buyers use to buy the product from the vendor; many large and small enterprises use purchase orders to buy their goods and services from the vendor and sell them to the customer at a reasonable price. They aim to earn the maximum profit from it. 

A company can create its purchase order by itself, for instance, on excel, short books, and e-procurement software, etc. Many enterprises see purchase orders as a crucial document to run their business in a very legal manner, and it costs them a huge benefit because they always have a legal record of their orders and full details about how much they have ordered the product quantity and at what price they have ordered their products. This document helps the entrepreneurs from making any mistakes or errors while ordering the raw material.

A purchase order can also help businesses avoid the surprise price (sudden increase in the product price).

What Is A Purchase Order?

A purchase order template is a document used by the buyers and sent to the vendors that specify the details of the goods and services ordered by the buyers. We can also say that it is a legally binding agreement between buyers and the vendors (when the vendor accepts the purchase order, then the contract is formed between the vendors and the buyers) related to the goods and services they have ordered at that date and at that price. 

Purchase orders act as a request made by the buyers, and it is a first step in creating a legal agreement between the buyers and sellers.

It serves as an offer to buy a specific product in a particular amount, price, and quantity.  

The vendors can not change the product price after the purchase order template; they have to give the goods at that price. Through this, an entrepreneur avoids the surprise price raise because, according to the purchase order template, now the vendors can't raise the commodity's price; he has to give the goods at that date price when the purchase order is made.  

It is most helpful in the business which orders in a large quantity of raw material or the vendors supply them regularly. At that time, the purchase order template play's a vital role by helping them maintain the records of orders and selling. Many small enterprises are tempted to place large orders over the phone, which can cause inaccuracies that result in the loss of money.

What Is A Purchase Order?

Uses of purchase order template: 

  • It helps in keeping track of their purchases
  • Avoid inaccuracies
  • Help in avoiding surprise rise in price
  • Helpful in ordering a large number of raw goods
  • Support in maintaining a good relationship between the buyers and the sellers
  • It helps in eliminating confusion for the vendors
  • Reduces the risk of hearing loss
  • It helps in removing incorrect quantities.

The purchase order template includes the following details:

  • Purchase order number- purchase order number helps the buyers in tracking their orders.
  • Name and logo of buyer company- it helps in identifying the order
  • Address of buyer- it is crucial because the goods he orders have to come to the right place.
  • The name of the sellers is also the most important thing because it refers to the seller from which they have ordered their raw goods.
  • Terms and conditions- the terms and conditions of the company in purchasing the product
  • Terms and condition for the transaction- each company have its terms and conditions at which they do the marketing, so the vendor must be agreed to the terms and conditions
  • Date of issuing- the date at which we have given our goods. In this, the supplier should mention the date of the delivery of products.
  • Delivery location- the location at which the buyers wish to deliver its products.

The information that should be provided in the purchase order are:

In purchase orders, there is a lot of information that both buyers and sellers should provide. 

  • The buyer should type the name in which the product is issued
  • A detailed description of goods should be provided
  • The purchase order should be signed by the authorized person
  • Also, give a detailed description of the product quantity
  • The date on which the product is going to be delivered
  • Price of each product

Format of purchase order

Format of purchase order
  • Header- in this, the buyers provide the company information, company logo, or slogan.
  • Information of supplier- in this, they indicate the proper recipient of the purchase order.
  • Ship to – where the order should be sent
  • Detail description- in this, the company should provide a detailed description of the product.
  • Summaries- the purchase order should be completed by providing the subtotal of the purchase.

How to create one on Word/Excel? 

The company also creates the purchase order; they can generate the purchase order template on excel, word, short books, and e-procurement, etc.

In Excel, they can create a readymade purchase order. They have to add the content to it. Making a purchase order template in Excel is very easy because it is very user-friendly, and we can store as much data as we want on the computer and store it for good.

How to create a purchase order template in Excel

  • Open Excel
  • Open a new document in Excel
  • Click on the icon at the top left of the screen
  • Then choose “new” and “purchase order” from the list
  • Excel will show you several template orders options that are available, then select the one which fits you the best
  • Click on create
  • After this, you will enter the details of a purchase order to illustrate your business name, company logo or slogan, and more.
  • Like with the world version, you will be able to save the template so that you don't have to re-enter those details again and again; it will help you keep your time.

So, by this, a company can create its purchase order template and add whatever they want to add according to their demand.

Creating an order using Word 

The company can create the purchase order by using word within a few minutes; the steps in making the purchase order in a comment are-

  • First, open a Microsoft word document and click on the MS icon on the top left corner of the screen.
  • From there, a drop-down list will appear, and then choose the option 'new.' 
  • Under new, a list of template options will appear; choose the purchase order.
  • If you can't find the template, then choose the installed template 

Type purchase orders in the text box to make them easier to find.

Which is the better way to create a purchase order template?

Microsoft Word is better to create a purchased template than Excel because it is easy to assemble. We can create a purchase order template in a matter of minutes in word. Hence, the company prefers this as more convenient to make it on the word than on Excel. Still, nowadays, we can find that entrepreneurs are more aware of creating a purchase order.

Why is the purchase order template is different from the invoice?

A purchase order template is a detailed description of the product; it contains all the information regarding the product and its delivery date. In the purchase order, they confirm the order ordered by the buyers. In contrast, the invoice contains the request payment of the order; it works after the order is fulfilled; the work it does is to make the payment regarding the order quantity and the price set while making the purchase order template. It includes the details about payment terms, applicable discount, the total amount due, etc. 

There are some similarities between the purchase order template and the invoice that are-

  • Both purchase orders and invoices refer to the same goods and services.
  • Purchase order and invoice both are the legal binding agreement
  • The document list regarding the buyers is the same in both


Purchase orders help the entrepreneur order a large number of products and help keep track of them. It helps in reducing human error and makes it easier to order in large quantities. A company can even make its purchase order on Excel or Word easily; it helps them manage the transactions' records. When a company once formed the product purchase in Excel and filled the content, they don't have to do this again, and again the data is saved automatically, and you don't have to re-enter those details. 

As we know, a purchase order makes a legally binding agreement between the parties, which makes it more legal to work, and with the help of computers, a company can store the data as long as the company wants. It also increases the automated security system that helps in keeping the records safe and can be set up so only the authorized person can access them. The company can store all its vendor information in one place, which automatically helps in saving time as well as money. They can customize and automate the purchase order creation for all categories.

The larger the organization, the more important the purchase order is for them to connect with the vendors. This becomes more useful and important for a larger enterprise to run its business smoothly.

By using PO and invoice, the receiving department can ensure that they receive the item they order.

Fashinza is a leading clothing manufacturing company that is trusted by major brands in the country. You can get more details on purchase orders from them by clicking on this link. 


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