In business, most transactions that are done in a company require various types of paperwork or documents. Properly documenting these transactions is essential for any business, whether you are just starting out in the business industry or even if you have been running a business for quite a while now. When a client or customer makes a transaction with the business, he/she will need to provide a written document such as a purchase order form in order to confirm that he/she will be making a purchase. With every transaction process, there is a corresponding document that is needed to be created.
One of the most important documents that a business can have is a purchase order invoice. A purchase order and invoice is a document that is used to remind a business’s client/s of the payment for the products and services that have been delivered to them. Without a written document, the business can face the risk of not getting paid on time, or not get paid at all. In this article, we will further talk about the definition of a purchase order invoice, the reasons why it is important for both small and large companies, plus the elements and the components of a purchase order invoice. You can also download the samples and templates that we have provided below to help you start your purchase appraisal order invoice. This will be useful in helping you format and outline your document.
Purchase Order Template
Simple Purchase Order Template
Purchase Order Invoice Checklist
Purchase Order Example
Printable Purchase Order Invoice
What Is a Purchase Order Invoice?
A purchase order invoice is a document that is used by businesses and organizations to list down all the items that have been purchased by a buyer from the financial statement for business. It includes the names of both the buyer and the seller, the number of items purchased, the unit price for each of the items, the total price, and other deductions such as the taxes, delivery charge, and so on. The information included in a purchase order invoice log is based on the purchase order document sent by the client or the buyer to the business or the seller of the products and/or service.
For example, a buyer needs to provide a purchase order to the seller in order to confirm that the buyer will be buying a particular item/s from the business. Through this, the business will be able to prepare and package the items from their inventory report before it is shipped or delivered to their clients. After the purchase order process has been made, a purchase order invoice is then created which includes a purchase order number, the list of items delivered, and other relevant details about the transaction.
Reasons Why a Purchase Order Invoice Is Essential for Businesses
Often, many businesses rely on verbal communication when making transactions with their clients. Although you may think that doing it verbally is easier for both parties, this can become a problem especially since proper documentation is essential for any business. There are many reasons why a purchase order request invoice is important for business. We have listed down below the reasons why a purchase order invoice is important.
The reasons why a purchase order invoice is important are as follows:
- Since a business deals with various clients and customers, a purchase order invoice is important because it helps you avoid having duplicate orders from the same client. A purchase order template not only allows you to keep track of the orders made by clients but also in ensuring that the items being delivered are correct.
- A purchase order invoice is also an important document to ensure that you will be paid by the client at the specified date indicated on the invoice. It is also an important document that is used to remind your customer request and clients to pay a particular amount for the products and/or services that have been delivered and received.
- A purchase order invoice is also an important document used when conducting audits in the business. All the information contained in a purchase order invoice is essential to be able to get accurate results when auditing a business’s financial statement resources.
- A purchase order invoice is important since it can be considered a legal document to prove that items have been delivered by the business to a particular client. This can be used in a court of law as evidence in the event that a client fails to pay for the items delivered at the specified date.
Purchase Order Invoice Format
Blank Purchase Order Template
Sample Purchase Order in PDF
Purchase Order Request Template
Services Purchase Order
Important Elements of a Purchase Order Invoice
A purchase order invoice needs to be comprehensive, organized, and precisely created for it to be highly usable and relevant to the operations of the business and the needs that are needed to be supplied for the customers. For you to be able to complete a purchase order invoice, you need to consider the important invoice elements that are as follows:
- The format that you will use to structure the layout of the purchase order invoice document
- The overall appearance of the purchase order invoice, which is necessary to be relevant to your image branding
- The complete content that you will include in the purchase order invoice
- The relation of the entirety of the purchase order invoice sample to your operations
What to Include in a Purchase Order Invoice
As we all know, creating an effective and usable invoice for your business is important to ensure that the business gets paid for the products and services that they provide to their clients, as well as to lay out the terms on how a customer should pay. Below, we will discuss the essential elements that you need to include when creating a purchase order invoice.
The items to include on a purchase order invoice are the following:
Information about the Company
Whether you are dealing with a business to a business transaction or a business to a customer transaction, one of the most important things that you should include in your purchase order invoice quotation is the company information of both the seller and the buyer. For the business, it is necessary to include all the important company information such as the name of the business, its address, as well as contact information/number. Your document should also specify the name of the party who has received the products/services and is responsible to pay for the costs.
In the header of your document, it is important to specify the type of document being created. In this case, write the words “Purchase Order Invoice” in the requirement document to ensure that both parties will have a clear understanding of the type of document being used.
The Invoice Number
Every purchase order invoice that you will be creating should include an invoice number or a unique identifier to ensure that the business can easily keep track of the transaction process. The date is also an important component of a printable invoice to indicate when the invoice was issued to the client or customer.
The Goods and Services Provided
A detailed list of the products, goods, and services delivered by the business should be present in the purchase order invoice that you will be creating. Include the name of the product or service, the quantity delivered, the unit price, and the total price of the items.
Terms of Payment
The terms of payment are one of the most important components in a purchase order invoice example. These terms specify the number of days wherein a client should pay for the items, the penalties that will be charged to the client should they fail to pay on time, and other important information.
Fees and the Total Amount Due
Other fees such as tax fees, delivery fees, handling fees, and so on should be specified in the use of invoice that you will create. Also, include the total amount due for all the items that were delivered to the client.
If your business provides other payment options such as credit card payments, cash payments, etc., for your clients and customers, it is important that you clearly specify it in your document.
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