Purchase Order Template: Free PO Template for Small Businesses

By Nicole Hullihen, former SaaS Chief Operating Officer and Microsoft MVP · Updated October 31, 2026

When orders are placed by phone, text or a quick email, it's easy to lose track of what was ordered, at what price and when it's supposed to arrive. Then the invoice shows up with a different price, or the delivery is short, and nobody can prove what was agreed. A purchase order puts every order in writing before you buy.

This guide includes a free purchase order template and a PO log, and explains what to include, how to number and approve POs, how to confirm and receive orders and how to match invoices before paying.

What Is a Purchase Order?

A purchase order is a document a business sends to a vendor to order goods or services. It lists exactly what you're buying, how many, at what price and when you need it. Once the vendor accepts it, the PO is the record of what was agreed.

See purchase order vs. invoice for more on the difference.

Free Purchase Order Template

What to Include on a Purchase Order

PO Numbering

Use a simple, sequential numbering system so every PO is unique and easy to find:

Never reuse a PO number, even for canceled orders. Mark canceled POs as void in your log.

Approving Purchase Orders

Set approval levels so purchases match your budget and authority:

These amounts are examples. Choose limits that fit your business. See purchase requisitions and approvals.

The Purchase Order Process

1. Identify the need from inventory counts, job plans or a request.
2. Get quotes if the purchase is large or new.
3. Create the PO with items, prices and delivery date.
4. Get approval based on your limits.
5. Send the PO to the vendor and log it.
6. Get confirmation of price, quantity and delivery date.
7. Receive the delivery and check it against the PO.
8. Match the invoice to the PO and receiving record.
9. Pay and close the PO.

Confirming Orders With Vendors

Ask vendors to confirm each PO, especially prices and delivery dates. A short reply is enough. If the vendor changes anything, like a price, substitute item or later delivery, update the PO and note the change before the goods arrive.

Receiving Against the PO

When the delivery arrives, compare it to the PO and packing slip. Count items, check for damage and note shortages or substitutions before signing. Record what was received on the PO or in your receiving log. See the receiving log.

Matching the Invoice

Before paying, compare the vendor invoice to the PO and the receiving record. This is often called a three-way match. Pay for what you ordered and received, at the price you agreed to. Hold invoices that don't match and contact the vendor. See three-way match and the accounts payable log.

Free Purchase Order Log

A PO log shows what's on order, what's late and what's waiting for an invoice. Review open POs weekly.

Changing or Canceling a PO

• Contact the vendor as soon as possible.
• Issue a revised PO with the same number plus a revision letter, like 1045-A.
• Note what changed and why.
• For cancellations, get written confirmation from the vendor.
• Mark the PO as void or revised in your log.

Check the vendor's terms. Special orders may not be cancelable once production starts.

Purchase Orders by Business Type

Contractors should put the job number on every PO so materials are charged to the right job. See the material takeoff template.

Do You Need a PO for Every Purchase?

Not always. Many small businesses use POs for inventory, materials and anything over a set amount, and use a company card or petty cash for small, one-time purchases. Recurring services like utilities and software subscriptions usually don't need a PO each month. The goal is control where it matters, not paperwork for every pack of pens.

Example: A Small Contractor

A remodeling contractor let crew leads call in materials orders from job sites. Invoices came in with prices nobody remembered agreeing to, and materials for one job were often charged to another. The owner started using numbered POs with job numbers, required approval for orders over $1,000 and matched invoices to POs before paying. Pricing disputes dropped and job costs became accurate.

Common Purchase Order Mistakes

• Ordering without a PO and hoping the invoice is right.
• Duplicate or reused PO numbers.
• No approval before ordering.
• Missing job or department codes.
• Not checking deliveries against the PO.
• Paying invoices without matching them.
• Leaving POs open long after they're finished.

Purchase Order Checklist

Sample Completed Purchase Order

This sample uses made-up items and prices for PO #2026-0145, job J2214, deliver to the job site by 8 a.m. Tuesday. Notice the job number and delivery details, which help the vendor deliver correctly and keep job costs accurate.

Blanket Purchase Orders

A blanket PO covers repeated purchases from one vendor over a period, up to a set dollar amount. It's useful for regular orders like weekly food deliveries or ongoing supplies. Each delivery references the blanket PO number, and you track spending against the limit.

Purchase Orders for Services

POs work for services too, like equipment repairs, cleaning or subcontracted work. Describe the work, location, schedule and price, or a not-to-exceed amount for work billed by the hour. Attach the vendor's quote. When the work is done, confirm it was completed before approving the invoice.

Getting Vendors to Use Your PO Numbers

• Ask vendors to put your PO number on every packing slip and invoice.
• Include the request in the PO itself and in your vendor setup instructions.
• Return invoices without PO numbers for correction when practical.
• Note PO requirements in your vendor list.

When PO numbers appear on every document, matching becomes quick and accurate. See the vendor list template.

Budgeting With Purchase Orders

Open POs are money you've committed but haven't paid yet. Adding up open POs by department or job shows how much of your budget is already spoken for, before invoices arrive. This helps managers avoid overspending and gives the owner an early view of upcoming bills.

Reviewing Open Purchase Orders

A weekly 15-minute review of open POs catches late deliveries and missing invoices before they become problems.

PO Records

Keep each PO with its confirmation, packing slip, receiving record and invoice. Together they show what was ordered, received and paid. Organize them by PO number or vendor so they're easy to find. Ask your accountant how long to keep purchasing records.

Purchase Order Terms and Conditions

Many businesses print short terms on their POs. Common terms include:

• Prices and quantities on the PO are final unless changed in writing.
• Please include the PO number on all packing slips and invoices.
• Substitutions require approval before shipping.
• We may refuse or return items that are damaged or not as ordered.
• Invoices will be paid according to the payment terms on this PO.

Keep terms short and clear. For large or complex purchases, a separate contract may be more appropriate. Have an attorney review standard terms if you rely on them heavily.

Purchase Orders and Inventory

For businesses that stock inventory, POs connect counts to orders. Count stock, compare to par levels or reorder points, create POs for what's needed and track what's on order so you don't double-order. See the office supply inventory list for a simple reorder system.

Spreadsheet Tips for a PO Log

• One row per PO, one column per field.
• Add a formula for days past expected delivery.
• Use filters to show open POs by vendor or job.
• Total open POs by department to see committed spending.
• Keep a separate tab for closed POs by month.

A spreadsheet PO log works well for many small businesses. As volume grows, a purchasing system that links POs, receiving and invoices saves time on matching.

Getting Started With Purchase Orders

1. Choose a numbering format.
2. Set approval limits.
3. Customize the template with your company details and terms.
4. Decide which purchases require a PO.
5. Tell vendors to reference PO numbers on all documents.
6. Start a PO log and review it weekly.

Most small businesses can start using POs within a week. Begin with your largest vendors and highest-dollar purchases, then expand.

Purchase Order Quick Reference

Keep this list near whoever places orders. A few consistent habits make purchase orders worth the effort, and they turn purchasing from a scramble into a routine your whole team can follow.

When a Vendor Ships the Wrong Thing

If a delivery doesn't match the PO, note the difference on the packing slip and your receiving record before signing, take photos and contact the vendor the same day. Ask for a corrected shipment, credit or return authorization, and don't pay that part of the invoice until it's resolved. Your PO is the proof of what you ordered. See the return to vendor form.

Over time, your PO log also becomes a buying history. You can see how prices from each vendor changed, how often orders arrive late and how much you spend with each supplier, all of which helps when negotiating better terms.

Start with the template above, use it for your next order and build the habit from there.

Even a handful of POs a month pays off the first time an invoice doesn't match.

Manage Purchase Orders With Updoot

Updoot's purchasing software creates and approves POs, tracks receiving and matches invoices in one place.

Frequently Asked Questions