A purchase order (PO) turns a site need into a commitment to buy. It names the vendor, the delivery site, each item with quantity, unit and rate, taxes, delivery dates, and payment and transport terms. Once approved and sent, it becomes the reference for deliveries and bills.
A typical chain is: site raises a material requisition, office compares quotes and raises a PO, the supplier delivers, site makes a GRN, and accounts match the bill against the PO and GRN before paying. This three-way match catches wrong rates and short supply.
An approved PO counts as committed cost against the budget. Closing POs that will not be fully delivered keeps that figure accurate. Avoid verbal orders to suppliers: if there is no PO, there is nothing to check the bill against, and disputes over rates or quantities become one word against another.
Example
Illustrative: PO to a steel dealer for 10 t of 12 mm TMT at ₹60,000 per t, delivery in two lots, payment 30 days after each delivery.
Procurement in CivilPilot
Purchase orders with approval, goods received in full or in part, and what you owe each vendor.
