A purchase order number is a unique alphanumeric code assigned to a formal agreement to purchase a product or service. The generation of a valid purchase order number signals the beginning of a legal buyer’s agreement and serves as a reference point for both buyers and sellers. It uniquely identifies the purchase order document and all related transactions.
The format of purchase order numbers is established by the purchasing organization, consistent with the tools used to implement the purchasing system. The simplest PO number format is an integer, in which each successive new purchase order has a number that is one value higher than the last previously issued purchase order. This is the layout of purchase order form books, and it is usually the default process of most electronic purchasing software systems.
Since an officially issued PO number is binding upon the buyer, the purchase order numbers must be issued by a company-sanctioned system and an authorized employee of the buying organization.
Numbers Track Purchased Goods
In many companies, a purchase order number is required for all services or merchandise ordered. Purchase order numbers facilitate company department budgeting and tracking of shipments. Shipping personnel at vendors are usually instructed to put the purchase order number on all packing slips and shipping labels.
From Purchasing to Accounting
In a similar manner, the purchase order number also appears on the invoice and related payment-request paperwork sent by the vendor to the customer. It also provides the accounts payable department with verification that the expense is legitimate. Validly issued purchase order numbers make paying invoices much easier. Their issuance places money on hold to be paid to the corresponding vendor.
The purchasing employee simply needs to verify the received goods, place the purchase order number on the invoice and let Accounting handle payment to the vendor.
An OrderGen Purchase Order Number
OrderGen generates PO numbers according to formats customized by the software user, or using the simple auto increment method described above. According to the image on the left, the next po number generated will be 33031010.