Purchase Orders serve as a legally binding document of the goods/services ordered. It is a standard document that is important for both the buyer and the vendor.

Here are the 4 main problems you might encounter during the business that can be prevented by using a Purchase Order:

1. Tracking Orders and Inventory

When the business scales up, your company will definitely need to take up more transactions to further expand your business. It would be a disaster if you lost track of your goods, or even had no idea of what you had ordered.

Purchase Orders can help keep track of what has been ordered and from whom. It helps you to keep a track of incoming orders and manage your stock/inventory.

2. Avoiding Disputes Arising from Poor Communication

Good communication just makes everything better. At the core, Purchase Orders clearly communicate all the details of a purchase. By having everything such as payment due date, and delivery date clarified, laid out and documented, you avoid potential conflict or confusion with your clients in the future.

3. Avoiding Surprise Price Increases

If a supplier has changed their price between the date of order and date of delivery or invoice, a Purchase Order clarifies the agreed-upon price for both parties and clears up potential miscommunication.

4. Providing Legal Protection

In the event of a dispute, Purchase Orders serve as proof of the commercial relationship between the buyer and seller, as well as provide any crucial details related to the transaction in dispute.

Key Takeaways

Advantages of a Purchase Order include

• Tracking Orders and Inventory
• Avoiding Disputes Arising From Poor Communication
• Avoiding Surprise Price Increases
• Providing Legal Protection

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