C1 - Section 5 Purchase orders

Question 1

Purchase order definition

Answer 1

A buyer generated document that authorises a purchase transaction.

Question 2

How do purchase orders work?

Answer 2

If the customer is happy with he quoted price, then a ‘purchase order’ (AKA order) is put in with the business.

This order may be be phone, email, generated through a website, fax or in writing.

it is important to double check:

• Does the price agree with what was quoted?
• Are the delivery terms acceptable?
• Are any discounts applicable?

Question 3

What information is usually found on a purchase order?

Answer 3

• Name and address of business placing order.
• Order date
• Order number
• VAT reg number of business placing order
• Name/address of business the order is placed with
• Product/service details
• Product reference
• Quantity bought.
• Unit Price ex VAT
• Total ex VAT
• Purchase authorisation signature