What is a purchase order and why use one?

A purchase order (PO) is a buyer-issued document that formally requests goods or services from a vendor at agreed prices and quantities. Once accepted, it becomes a binding contract. POs create a clear paper trail for budgeting, approvals, and matching invoices to deliveries.

What is the difference between ship-to and bill-to?

Bill-to is where the invoice should be sent and who is responsible for payment, usually your accounts department. Ship-to is the physical address where the goods should be delivered, which may be a warehouse, site, or different office.

What does a PO number do?

A unique PO number lets both buyer and vendor reference the same order across quotes, deliveries, and invoices. The vendor should quote your PO number on their invoice so your accounts team can perform three-way matching (PO, delivery note, invoice).

Should I include tax and shipping on a PO?

Yes, where known. Including tax and shipping gives the vendor and your finance team the expected total so there are no surprises when the invoice arrives. If the vendor calculates these, you can leave them at zero and note 'tax and shipping per vendor quote'.

Is my PO data stored anywhere?

No. The purchase order is generated in your browser and your draft stays only on your device. Nothing is uploaded.

What is the Purchase Order Builder?

Create a standard purchase order with a PO number, buyer and vendor details, ship-to address, line items with unit costs, totals, tax, and delivery and payment terms. Copyable and printable. It runs free in your browser on Gera Tools, with nothing uploaded.

Purchase Order Builder

Name: Purchase Order Builder
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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A clean, formal purchase order vendors will accept

A purchase order is how a buyer formally commits to an order: it names the vendor, lists exactly what’s being bought at what price, states where it ships and when it’s needed, and sets the payment terms. This builder produces a standard PO with a unique PO number, separate bill-to and ship-to addresses, itemised costs, tax and shipping, and clear delivery and payment terms.

How it works

Each line contributes quantity × unit cost to the goods subtotal. The tool then adds tax and a flat shipping charge to reach the order total:

line total = quantity × unit cost
subtotal   = sum of all line totals
tax        = subtotal × (tax rate ÷ 100)
total      = subtotal + tax + shipping

The PO number ties the document to future deliveries and invoices, while the requested delivery date and payment terms (e.g. Net 30) set expectations the vendor agrees to by fulfilling the order. Amounts are formatted in your chosen currency.

Worked example

For example, a small business orders 50 units of a component at £8.00 each, plus one installation kit at £45.00. Shipping is £15.00 and VAT is 20%.

Line 1: 50 × £8.00  = £400.00
Line 2:  1 × £45.00 = £45.00
Subtotal            = £445.00
Tax (20%)           = £89.00
Shipping            = £15.00
Total               = £549.00

The buyer issues PO-2026-007 and expects delivery by a stated date. The vendor quotes PO-2026-007 on their invoice, allowing the buyer’s finance team to do a three-way match: PO, delivery note, invoice.

When to use a purchase order

A PO is most useful when buying from a vendor on credit terms, ordering recurring goods across multiple deliveries, buying above a spending threshold that requires an internal approval trail, or dealing with a supplier who has their own invoicing and fulfilment cycle. For one-off spot purchases paid immediately by card, an informal email may suffice — but a PO creates an auditable record that accounting, auditors, and your future self will appreciate.

Payment terms explained

Term	Meaning
Net 30	Full payment due 30 days after invoice date
2/10 Net 30	2% discount if paid within 10 days, else full amount due in 30
COD	Cash on delivery — payment due when goods arrive
EOM	Payment due at end of the month the invoice is dated
Net 60	Full payment due 60 days after invoice — common for large orders

Tips and notes

Use a sequential PO scheme (PO-2026-001) so each order is uniquely traceable across documents.
Always fill in ship-to even when it matches bill-to — vendors rely on it for delivery and it prevents misrouted shipments.
State payment terms explicitly (Net 30, 2/10 Net 30, on delivery) to avoid disputes.
Ask the vendor to quote your PO number on their invoice so your team can match PO, delivery note, and invoice before paying.
Include a line for any restocking or minimum order requirements, and note whether partial deliveries are acceptable.