Procurement inefficiencies can cost businesses millions each year. Companies may lose 5–10% of their procurement spend to manual approvals, duplicate orders, and rogue purchases, according to Penny’s analysis of procurement inefficiency.

A purchase order (PO) template helps eliminate those bottlenecks by standardizing how you request and track purchases.

Creating a new purchase order from scratch every time is tedious. A reusable PO template makes the process faster, more consistent, and more professional, so your team can focus on managing supplier relationships rather than paperwork.

Here's our purchase order template you can download for free:

What is a purchase order?

A purchase order (PO) is a document a buyer sends to a supplier to confirm what they’re ordering, such as quantities, prices, and delivery details. It serves as an official request and creates a record of the transaction before any money changes hands.

For example, a marketing manager might submit a purchase order to a printing vendor for 1,000 brochures. Once the vendor accepts the PO and delivers the materials, they send an invoice for payment, creating a clear paper trail from order to payment.

While a purchase order initiates the transaction, an invoice finalizes it by requesting payment once the goods or services have been delivered. In other words, you issue the PO to place the order, and the vendor issues the invoice to get paid.

Using purchase orders helps you track spending, avoid duplicate orders, and maintain a transparent record with suppliers. They also make it easier for your finance team to verify invoices and keep your procurement process running smoothly.

Key components of a purchase order

Every purchase order should include a few key details to keep your procurement records clear, accurate, and accountable.

Essential information fields

• Purchase order number: A unique identifier that helps your team track and match the order to invoices and delivery receipts
• Buyer and vendor details: Include company names, addresses, and contact information for both parties
• Shipping information: Specify where and when goods should be delivered, along with any special instructions to prevent delays or errors
• Item descriptions and quantities: List each product or service clearly, including part numbers, quantities, and specifications
• Pricing and totals: Include unit prices, applicable taxes, discounts, and the overall total to maintain transparency and simplify record-keeping

Terms and conditions

Your purchase order should include key contractual details that define expectations upfront. Clear terms help prevent misunderstandings and ensure both parties agree on the scope and timing of the transaction.

• Payment terms: When and how the supplier will be paid (for example, net 30 or net 60)
• Delivery expectations: Deadlines, shipping methods, and penalties for late or incomplete deliveries
• Returns and cancellations: The process and conditions for returning items or adjusting the order

Legal considerations

A purchase order becomes legally binding once the supplier accepts it, either by signing or beginning to fulfill the order. Authorized signatures from both parties confirm agreement to the terms and conditions.

Keep these signed records on file for audits, dispute resolution, and compliance with your company’s procurement policies.

Types of purchase orders and when to use them

‍Selecting the right purchase order template helps your procurement team stay organized and efficient. Each type serves a different purpose depending on what you’re buying and how often you buy it.

Standard purchase orders

Use a standard purchase order for one-time purchases when your company knows exactly what it’s buying and when. These POs include full details like item descriptions, quantities, delivery dates, and payment terms.

Blanket purchase orders

Blanket purchase orders (BPOs) are used for recurring purchases from the same supplier over a set period—like monthly office supply restocks or regular maintenance services. They save time by grouping repeat orders under one agreement.

Contract purchase orders

A contract purchase order (CPO) establishes a legally binding framework for future purchases but may not specify exact items or quantities upfront. This format is ideal for long-term engagements, such as IT services or construction projects, where terms like payment schedules and warranties need to be defined early.

Planned purchase orders

A planned purchase order (PPO) outlines your intent to buy goods or services in the future without committing to specific delivery details. These are useful for forecasted or recurring expenses that require flexibility.

Retail purchase orders

Retail purchase orders are tailored for businesses that manage large inventories. They include SKU codes, supplier lead times, and minimum order quantities (MOQs) to help track and restock products efficiently.

E-commerce purchase orders

E-commerce purchase orders serve online businesses that sell physical and digital products. They specify technical details and fulfillment instructions, ensuring accuracy in both physical and digital transactions.

Manufacturing purchase orders

Manufacturing purchase orders are used to source materials for production. They often include a bill of materials (BOM), production schedules, and quality control measures to keep operations on track.

Wholesale purchase orders

Wholesale purchase orders are designed for businesses buying in bulk. They typically include bulk pricing, freight terms, delivery timelines, and any customization details like packaging or labeling requirements.

How the purchase order process works

The purchase order process keeps your procurement workflow organized from request to payment. Each stage ensures transparency, accountability, and control over company spending.

1. Creating a purchase requisition

The process begins when someone identifies a need for goods or services and submits a purchase requisition to the procurement team. The request includes item details, estimated costs, and justification for the purchase. Once submitted, it’s reviewed and approved by department heads or other stakeholders before moving forward.

2. Vendor selection and approval

After the requisition is approved, your procurement team evaluates potential vendors based on pricing, reliability, product quality, and performance history. Internal approval workflows confirm that vendor selection complies with company policies and budgets.

3. Issuing the purchase order

When a vendor is approved, your team creates and sends the purchase order—usually via email as a PDF or directly through an enterprise resource planning (ERP) system. Once the supplier acknowledges receipt, the PO becomes legally binding.

4. Order fulfillment and receipt

After accepting the order, the supplier delivers the goods or services as outlined in the PO. Your team verifies that the delivery matches the specified items and quantities. Many companies use a 3-way matching process to compare the PO, delivery receipt, and invoice before approving payment.

5. Payment and record keeping

Once the goods are received and verified, your accounts payable team processes the invoice and releases payment based on agreed terms. Keep all related documents, such as requisitions, POs, delivery receipts, and invoices, for audit and compliance purposes.

Create purchase orders faster with Ramp’s free template

A purchase order template helps you streamline how your business requests and approves purchases. Using a standardized form ensures every order is clear, consistent, and compliant, reducing errors and improving supplier relationships.

Ramp’s free purchase order template includes all the essential fields your procurement team needs to manage supplier purchases effectively. It’s easy to use and customizable for any department or business size:

How to create your own purchase order template

If you’d rather build your own template instead of downloading one, you can create a purchase order form in spreadsheet software like Excel or Google Sheets. A custom template lets you design a layout that fits your business and speeds up future orders.

Using spreadsheet software

Start by opening a blank spreadsheet and labeling columns with key purchase order details, such as item name, description, quantity, unit price, and total cost. Include sections for company details, vendor information, shipping addresses, and payment terms.

Add simple formulas to automate calculations. When you finish, save the spreadsheet as a reusable template so you can duplicate it for each new order.

Customizing templates for your business

After setting up your base template, personalize it to match your company’s needs and branding. Add your logo, business colors, and standard terms and conditions, such as payment timelines or return policies.

If you frequently order the same products, add dropdown menus or data validation lists in Excel or Google Sheets to quickly select items, suppliers, or cost codes. These small adjustments help your team save time, stay consistent, and reduce errors across orders.

Best practices for purchase order management

Managing purchase orders effectively keeps your business organized and provides visibility into company spending. Follow these best practices to improve accuracy and efficiency.

• Establish a clear numbering system: Use a consistent format so orders are easy to track and match with invoices and receipts
• Set approval thresholds and workflows: Define who must sign off on purchases based on order value or department
• Maintain a vendor database: Store supplier contact details, payment terms, and performance history in one centralized location
• Audit and reconcile regularly: Review purchase orders, invoices, and receipts on a set schedule to catch discrepancies early and keep records accurate
• Go digital where possible: Digital purchase orders reduce errors, save time, and make it easier to search and share records than paper-based systems
• Integrate with accounting software: Connecting your PO system to your ERP or accounting software improves visibility and automates matching and reporting

Common purchase order mistakes to avoid

Even small errors in your purchase order process can cause delays, overspending, or strained supplier relationships. Avoid these common pitfalls to keep procurement efficient and compliant.

• Incomplete or inaccurate information: Missing details like item numbers, prices, or delivery instructions can slow approvals and cause fulfillment errors
• Skipping authorization steps: Failing to route POs through the proper approvals may result in unbudgeted or duplicate purchases
• Weak vendor communication: Not confirming order details with suppliers can lead to misunderstandings and missed deadlines
• Poor record keeping: Losing track of POs, receipts, or invoices makes reconciliation and auditing more difficult
• Ignoring payment terms and return policies: Overlooking these details can cause compliance issues and payment disputes
• Lack of tracking: Without a system to monitor order status, it’s easy to miss deliveries or duplicate orders

Use Ramp to automate your purchase orders

Manual purchase order creation is tedious and prone to errors. It can also make it harder to track spending or reconcile invoices accurately.

Ramp’s procurement software automates every step of the process. Your templates, approvals, and records stay in one place, making it easier to issue purchase orders, match them with receipts and invoices, and process payments quickly.

Benefits of digital purchase order systems

Digital purchase order tools save time, reduce data entry errors, and make approvals more transparent. Platforms like Coupa, SAP Ariba, and QuickBooks Online automate matching and reporting, giving finance teams real-time visibility into company spending.

By automating procurement with Ramp, you can:

• Reduce manual tasks: Automation removes repetitive data entry so your team can focus on higher-value work
• Minimize errors: Ramp flags missing or duplicate information, preventing overspending and supplier disputes
• Gain visibility: Real-time analytics help you monitor spending trends and manage vendor relationships more strategically
• Stay compliant: Built-in controls and audit trails help you meet internal policies and legal requirements

Ready to simplify purchasing? Explore a free interactive demo.