Purchase order format and template

A purchase order, or PO, is a document the buyer sends to a supplier saying: we want these items, at these prices, delivered here, by this date. Once the supplier accepts it, it is the agreed basis of the deal. Everything that follows, the delivery challan, the goods received note and the invoice, gets checked against it.

PO, quotation or invoice?

The three documents cover the same goods at different stages, and they come from different sides.

• A quotation comes from the supplier. It is an offer: this is what we can supply and what it will cost.
• A purchase order comes from the buyer. It accepts the offer, or places an order outright, and fixes the quantities, prices and delivery terms.
• An invoice comes from the supplier after delivery. It asks for payment for what was actually supplied.

A PO does not ask anyone for money, so it carries no bank details. If a document headed Purchase Order carries bank details, someone has used the wrong template.

What goes on a purchase order

• The words Purchase Order, a PO number and the date
• Your business name and address as the buyer (the From block), with your NTN or sales tax number if your suppliers ask for it
• The vendor's name, address and contact person
• A Ship to address, if goods go to a warehouse, factory or site rather than your office
• A Deliver by date
• Each item with a clear description, quantity, unit and agreed unit price
• The line totals, subtotal, any tax, and the total
• Terms that matter to you: payment terms, the supplier's quotation number, packing or quality requirements
• The name and signature of the person authorising the purchase

Write descriptions the supplier cannot misread. "Cartons" invites an argument; "5-ply corrugated cartons, 18 x 12 x 10 inch, printed one colour" does not. If you are ordering against a quotation, quote its number, so both sides know which prices apply.

Tax on a purchase order

Showing tax on a PO is optional. The tax is charged by the supplier on their sales tax invoice, not by your PO. Many buyers still show it so the PO total matches the amount they expect to pay. In Invoicora the Pakistan preset adds the standard federal rate on goods for you, and you can switch the tax line off if you prefer to order at prices before tax.

The standard sales tax rate on goods in Pakistan is 18 per cent of the value of the supply, under section 3 of the Sales Tax Act 1990. Sales Tax Act 1990, FBR text updated up to 30.06.2026

Services are taxed by the province, usually at a different rate, and some goods are reduced-rate or exempt. If you are unsure which applies to what you are buying, ask the supplier what their invoice will charge and match the PO to it.

A worked example

Numbering and the three-way match

Number POs in one sequence, for example KF-PO-0142, KF-PO-0143, and never reuse a number. If an order is cancelled, mark the PO cancelled and keep it. If quantities or prices change after issue, either issue a revised PO with the same number and a revision mark (KF-PO-0142 Rev 1) or cancel and reissue, but do not quietly edit a PO the supplier already holds.

The PO is the first leg of the three-way match. When the supplier's invoice arrives, your accounts team compares it with the PO (what you ordered and at what price) and with the signed delivery challan or goods received note (what actually arrived). If all three agree, the invoice is approved for payment. If the supplier delivered 1,800 cartons against a PO for 2,000, you pay for 1,800, and the remaining 200 stay open on the PO until they arrive or you cancel them.

Who signs, and how many copies

A PO should be signed by whoever is authorised to commit the business to the spend: the owner in a small firm, a purchase manager or finance head in a larger one. Larger orders often need a second signature. Common practice is to send the original to the supplier and keep copies for purchase, stores (so they know what to expect at the gate) and accounts. The supplier's copy is now usually a PDF sent by email or WhatsApp.

Invoicora makes the PO in your browser, saves it on your device and downloads it as PDF, Word or Excel. No signup, no watermark, and nothing you type is uploaded. It produces the document only: it does not track deliveries, connect to your suppliers' systems or file tax.