The purchase order allows a buyer to get it in writing but, just as importantly, it drives your relationship with the seller. It lets everyone know what is expected of them. This video explains the different types of purchase orders and provides excellent examples of how they are used in business.
- There's an old saying that once you reach … an agreement with someone, you should get it in writing. … And in the business world, … that's the purpose of a purchase order. … Once the buyer and the supplier reach an agreement, … the basic terms of that agreement … are spelled out in the purchase order … so that there are no misunderstandings. … You will define such things as the price, … the number of items, and delivery dates. … But the purchase order is much more … than just a document of the agreement. … The purchase order drives the buyer-supplier relationship … for each business transaction. … The order tells everyone involved in the transaction … exactly what is expected of them. … Copies of the agreement are sent to the supplier … and the company departments like accounting, … shipping and receiving, distribution, and transportation. … Each department uses the purchase order … to coordinate their part of the contract. … It's definitely a much easier process if you have … a computerized system to connect all these parties. …
- Explain the purchasing process.
- Define purchase order.
- Describe the intent of a purchasing policy.
- Distinguish types of purchasing structures.
- List the steps of selecting a supplier.
- Identify enablers for success in worldwide sourcing.
- Perform price and cost analysis.
- Measure supply management performance.