What is Purchase Order?
PO, Purchase Order
An order that asks a supplier to send something, how much, and by when.
What it means
An order is an order to purchase materials. Write down which suppliers, which items, how many, and by when. It is also called PO, abbreviated as English Purchase Order.
Placing an order does not immediately increase inventory. An order is only a promise, and items must be received and processed to become inventory.
At the pen factory
On the second day, 60 pieces of black refill are not enough, so we place an order with Daehan Refills. However, Daehan Refills only sells in boxes of 200 pieces, so 200 pieces are ordered. The order number is P-1102.
Why it matters
You need to have order records so you know what will come in and when, so you can schedule production. When an item arrives, ordering is also the standard for comparing whether it matches what was ordered.
How this differs from Sales order
An order is received from a customer, and an order is placed with a supplier. An order from our factory is an order from the supplier's perspective.