What is a purchase order? Why is a purchase order so important?
In simple terms, a purchase order (PO) is an overseas purchasers order formally placed by the buyer to the seller, which lists in detail the specific information, quantity, price, etc. of the goods. It is not only an ordinary document, but also a legally binding certificate.
Many people may think that a purchase order is just a piece of paper. Is it really that important? In fact, the significance of PO in foreign trade is not just a formal “order” tool, it can also play the following roles:It is a written evidence of the agreement between the buyer and selleA PO is like a small contract between the buyer and the seller
Manage the purchasing process
for customers and provide a basis for financial payment and budget management
PO not only facilitates transaction record overseas purchasers management, but also helps companies arrange inventory and cash flow reasonably. Easy to track order statusWith a PO, customers can better track the order status, and we, the seller, can arrange production, stocking and transportation on the PO.
What key information does a purchase order contain?
1. Information of both parties
PO will clearly list the basic information of the buyer and seller, such as company name, address, contact person and contact information. This is an important prerequisite for ensuring the accurate delivery of the order. If you receive a customer PO and find any unclear contests are a great way to attrac parts, you to communicate and confirm in time.
2. Detailed description of the goods
The product description is the core overseas purchasers of the purchase order, including:
- Product name : For example, “40-inch LCD TV” or “High-quality cotton yarn”.
- Specifications : such as size, material, color and other detailed information.
- Quantity : Specify the specific quantity to be purchased. The unit can be box, piece, kilogram, etc.
- Unit price and total amount : the unit price of the product and its corresponding total amount.
3. Delivery terms Incoterms (International Trade Terms)
commonly in foreign trade , such as FOB , CIF , EXW , etc., to stipulate the division of responsibilities between the buyer and the seller. For example, under FOB (Free on Board), the seller is responsible for loading the goods onto the ship, and the buyer is s fomentar un objetivo mínimo de recaudación responsible for the subsequent transportation.4. Payment method
This part usually includes the payment overseas purchasers method (such as T/T wire transfer, L/C letter of, etc.) and payment time.5. Delivery time and location
Specify the specific delivery time (such as December 31, 2024) and location (such as Shanghai Port or warehouse address).
What is the process of PO purchase order?
The entire process of purchasing an order is shops 9177 actually not complicated, and is mainly divided into the following steps:
- The buyer creates a purchase order
based on the purchase requirements ensuring that all contents are complete and accurate. - Internal Approval
Before being officially sent to the seller, the purchase order usually to go through an internal revieprocess within the company to ensure that the terms meet the budget and
Things to note in practice
From my own experience, the following overseas purchasers two points are particularly worth noting:
The demand should be made clear
Don’t think it’s troublesome, the product specifications, quantity, quality standards, etc. must be clearly stated. Remember one sentence: it is better to spend more time on communication in the early stage than to have.