Purchase order

Meaning

A purchase order (أمر شراء) is issued by the buyer and, once the supplier acknowledges it, binds both to those items at those prices. It carries an order number, the delivery date and address, the lines with quantity and unit price, VAT shown so the supplier's invoice can be matched, and the names of whoever prepared and approved it. It is not a tax document; the supplier's tax invoice, which should quote the order number, carries the VAT.

Its value is control. A bill is paid only when three papers agree: the order (what was agreed), the delivery note (what arrived) and the supplier's invoice (what is charged). A line invoiced but not ordered, or at a higher price, or before delivery, is held. In an ERP the order also commits budget and tells the warehouse what to expect.

Also called: PO · order · أمر الشراء

Example

Al Noor issues PO-2026-0112 to Gulf Supplies for ten shelving units at 620.00 and two pallet jacks at 1,850.00, delivery by 27 October to the Riyadh warehouse. When the invoice arrives quoting the order, the system matches lines and prices and flags the jack that has not yet been delivered.