A purchase order (PO) is the document a business sends a supplier to order specific items at agreed quantities and prices, committing to pay for them on delivery under the terms written in it. It is preceded by a purchase requisition, an internal form a department raises so the purchase is approved before anyone contacts a supplier. Type the items once into this purchase order template and generator: you get the requisition with its approval chain, then, once approved, a purchase order with discount, VAT as charged in Saudi Arabia, and terms. Download it as a PDF for the supplier, or as Word or Excel.
How the generator calculates a purchase order
Each item total is quantity times unit price less its own discount. The items are added, the supplier's discount on the whole order comes off, and VAT is charged on what remains. On the requisition the price shows as an estimate before VAT, because the final price only comes with the supplier's quotation.
PO total = (Σ Qty × Price − Discount) × 1.15
Purchase order format: what goes on it
| Field | What to write |
|---|---|
| PO number | A sequential number the supplier is asked to quote on the invoice and delivery note, so the three can be matched before payment. |
| Supplier | Name as on the commercial registration, VAT number and phone. |
| Supplier quote reference | The number of the quotation you chose after the request for quotation (RFQ), to fall back on if the price is disputed. |
| Items | Description with model and specification, unit, quantity, unit price and discount. |
| VAT and total | VAT on its own line, and the total in figures and words. |
| Delivery | Date and address, and who pays for transport and unloading. |
| Payment terms | Days from receipt of the invoice, or the advance payment and its percentage. |
| Approval | Signatures of whoever prepared the PO and whoever approved it under your spending limits, plus the supplier's acceptance. |
Internal purchase requisition form
The purchase request is filled in by an employee or a department head: the requesting department, items and quantities, estimated price, the date the items are needed, and the reason. It then passes an approval chain before it reaches purchasing: the department manager, then finance if it exceeds a set amount. The generator lays the approvals out as a table with role, name, signature and date columns, and you can change the roles under Full details. Download Word gives you the requisition to print and fill in by hand, and Download PDF gives it as filled in on the page.
Purchase order in Excel and Word
The Excel file comes out with the items and formulas for line totals, discount and VAT, with one cell for the VAT rate and one for the discount, so the figures update if you change a quantity after negotiating with the supplier; saved once, it becomes your reusable PO template. The Word download suits anyone who wants to add the company logo or specific legal clauses before sending the order. Send the supplier the final version as a PDF and keep the editable files yourself. For an import order, this English page produces the whole PO in English for a foreign supplier, while the Arabic version of the page serves local suppliers.
Supply order and purchase order
A supply order is another name for a purchase order, used by government entities in the Kingdom and many companies, especially when materials are delivered in batches. It often comes with a delivery schedule and attached technical specifications. If supply is in batches, list each batch and its date in the extra terms.
The procurement cycle: from requisition to supplier invoice
- Purchase requisition: the department sets out what it needs and when.
- Approval: the department head and finance agree to the need and the budget.
- Request for quotation: purchasing asks for two or three quotations and picks the most suitable.
- Purchase order: issued to the chosen supplier with its quotation number as reference.
- Receipt: the warehouse receives the goods, checks quantities and specifications against the PO, and issues a goods received note.
- Supplier invoice: the accountant matches the invoice with the PO and the goods received note before paying (three-way match).
The three-way match stops you paying for an item that never arrived, or at a price you did not agree. For the goods received note, use the delivery note and goods received note generator. To request and compare quotations, use the request-for-quotation template.
Common purchase order mistakes
- Issuing the PO before the requisition is approved, or signing beyond your authority.
- A PO with no number, so the supplier's invoice cannot be matched to it.
- A vague description ("office furniture") with no model or size, so the wrong goods arrive.
- Leaving out the delivery date and address, so transport ends up charged to you.
- Paying the supplier's invoice before checking it against the goods received note.
- Charging VAT before the supplier's discount, so it comes out higher than the invoice.
What to do after you issue the purchase order
Send the PO to the supplier and ask for a signature in the acceptance box or a written confirmation, and give the warehouse a copy to check deliveries against. When the goods arrive, record what was actually received; if an item is short, the order stays open for the balance. When the invoice arrives, match it with the PO and the goods received note before paying. Share as link sends the generator with its items to a manager who reviews it before approval.
When purchasing runs to several orders a week
The generator handles one or two orders. Once several departments, suppliers and warehouses are involved, it gets hard to know which request was approved, which order arrived half-complete, and which invoice was paid before receipt. At Microtec we offer businesses in the Kingdom an ERP accounting system where purchasing sits with inventory, finance, sales and HR. Try a full purchasing cycle in it, from requisition to supplier invoice.