What is a purchase order (PO) and how does it work?
A purchase order (PO) is an official commercial document issued by a buyer to a supplier specifying the exact products or services, quantities, agreed prices and delivery terms being ordered. It replaces vague phone calls or chat messages with a clear written record before any goods are shipped.
A purchase order (PO) is a written order document that confirms which items, quantities and unit prices a buyer is requesting from a seller. Creating an order does not change your stock levels or contact balance on its own; stock and balances update only when the order is fulfilled and converted into an invoice.
What information belongs on a purchase order?
A well-structured order document serves as a single checklist for both the supplier preparing the shipment and your warehouse team receiving the boxes. When every detail is written down upfront, checking incoming stock against what was ordered takes only a few minutes.
In many small businesses, orders are still placed informally with a quick text message asking for 'twenty more boxes like last time'—which often leads to wrong pack sizes or unexpected price increases on the final bill. A complete order document always includes four core elements.
- Order number, issue date, expected delivery date and full contact details for both buyer and supplier.
- Each product's name, stock code (SKU) or barcode, unit of measure and exact ordered quantity.
- Agreed unit prices, any line or document discounts, applicable tax rates and total order value.
- Delivery address, packing or shipping notes and the agreed payment terms.
Purchase order vs. quote vs. invoice: what is the difference?
Quotes, orders and invoices represent three distinct stages of the same trade: a quote is the seller's price proposal; an order confirms the agreed items and quantities to be prepared; and an invoice is the final billing document issued when the goods are delivered.
The most important practical difference lies in inventory and accounting impact. Because an open order represents goods that have not yet been delivered or billed, recording an order does not add or deduct stock and creates no receivable or payable balance on the contact account. Stock movements and contact balances are recorded only when the order becomes an invoice.
How orders work in GiroPS
In GiroPS, you can create orders in seconds, share clean PDF order documents with suppliers or customers via WhatsApp or email, and receive incoming customer orders directly through your shared **Online Catalog** link. Every order's status—pending, approved or completed—is tracked in one list.
When the shipment arrives or is dispatched, you never have to retype line items: converting the order into an invoice with a single tap carries over all products, quantities, discounts and prices. While preparing the shipment, you can also print a price-free **Delivery / Packing Slip** directly from the order screen.
Practical scenario
Example: from low-stock alert to order and purchase invoice
A hardware store notices that silicone sealant cartridges have dropped below the critical stock threshold of 30 units. The owner creates an order for 200 cartridges at the agreed unit cost of 85 and sends the PDF to the supplier. At this stage, the store's stock count and the supplier's payable balance remain unchanged. Two days later, when the 200 cartridges arrive at the warehouse, the owner converts the order into a purchase invoice in one tap—instantly adding 200 units to stock and updating the supplier's account balance.
Frequently Asked Questions
Does creating an order immediately change my stock quantity?
No. An order tracks items that are requested or being prepared; your physical stock quantity and contact account balance only change when the order is converted into a confirmed invoice.
What if a supplier delivers only part of the ordered quantity?
When you convert the order into an invoice, simply adjust the line quantities on the invoice screen to match what actually arrived. Only the delivered quantity will be added to your inventory and supplier balance.
Can I turn an approved price quote into an order or invoice?
Yes. Once a customer approves your quote in GiroPS, you can convert it directly into an order to prepare the goods, or straight into a sales invoice without re-entering any product lines.