A well-designed purchase order template gives a business a consistent way to tell suppliers exactly what it wants to buy, how much it expects to pay, where the order should be delivered, and which internal approval applies. Instead of relying on informal emails or messages, a purchase order creates a clear reference that purchasing, finance teams, and suppliers can use throughout the transaction. For UK businesses, it can also make invoice checking and financial record-keeping much easier.
Quick answer: A purchase order template is a reusable document used by a buyer to place and authorise an order with a supplier. A practical UK PO normally includes a unique PO number, buyer and supplier details, descriptions, quantities, prices, delivery information, payment terms, applicable VAT information, totals, and approval details.
Free Purchase Order Template for UK Businesses
The following blank format can be copied into Microsoft Word, Excel, Google Docs, or Google Sheets and adapted to your business. Keep the layout simple enough for suppliers and employees to identify the order number, delivery details, line items, and authorised total without searching through unnecessary information. If your organisation has an approval policy, you can also add fields for the requester, department, cost centre, budget code, or approving manager.
| Purchase Order Field | Details to Complete |
| Business name | [Your company name] |
| Business address | [Registered or trading address] |
| Purchase order number | [PO-0001] |
| Order date | [DD/MM/YYYY] |
| Supplier name | [Supplier/business name] |
| Supplier address | [Supplier address] |
| Supplier contact | [Name/email/telephone] |
| Delivery address | [Where goods/services are required] |
| Required delivery date | [DD/MM/YYYY] |
| Payment terms | [For example, 30 days] |
| Currency | GBP |
| Requested by | [Employee/department] |
| Approved by | [Authorised person] |
Line Items
| Item/Service | Description | Quantity | Unit Price | VAT Rate | Line Total |
| [Item 1] | [Specification] | [ ] | £[ ] | [ ]% | £[ ] |
| [Item 2] | [Specification] | [ ] | £[ ] | [ ]% | £[ ] |
| [Item 3] | [Specification] | [ ] | £[ ] | [ ]% | £[ ] |
| Order Summary | Amount |
| Subtotal | £[ ] |
| VAT, if applicable | £[ ] |
| Delivery/other agreed charge | £[ ] |
| Total authorised value | £[ ] |
Additional terms or instructions.
[Delivery instructions, agreed quotation reference, project number, warranties, special requirements, cancellation terms, or other relevant information].
Authorisation:
Name: [ ]
Position: [ ]
Date: [ ]
What Is a Purchase Order?
Purchase Order Templatecommonly shortened to PO, is a commercial document prepared by the buyer and sent to a supplier when goods or services are being ordered. It sets out what the buyer wants, the agreed or expected price, relevant quantities, delivery information, and other terms that apply to the order. Depending on the parties’ agreement and how the supplier accepts the order, the purchase order may also become part of the contractual record between them.
The sequence is important because a PO is normally created before the supplier invoices the buyer. After the supplier provides the goods or services, it can issue an invoice that refers back to the purchase order number, allowing the finance team to compare what was ordered with what is being charged. UK government departments such as the Home Office and Ministry of Justice use PO numbers in their supplier-payment processes, illustrating how useful a clear reference can be when matching invoices to approved purchases.
What Should a Purchase Order Include?
There is no single universal design that every UK business has to use for ordinary commercial purchase orders. However, a good template should contain enough information to identify the parties, describe the order precisely, show its authorised value, and explain where and when the supplier should deliver it. The more expensive or complicated the purchase, the more important clear specifications, references, approval details, and terms become.
| Field | Why It Matters |
| PO number | Gives the order a unique reference |
| Order date | Records when the buyer raised the PO |
| Buyer details | Identifies the organisation placing the order |
| Supplier details | Identifies who should fulfil the order |
| Delivery address | Prevents goods going to the wrong location |
| Delivery date | States when the order is required |
| Description | Defines exactly what is being purchased |
| Quantity | Shows how many units are authorised |
| Unit price | Records the agreed cost per unit |
| VAT treatment | Helps show the expected tax treatment where relevant |
| Total value | Shows the maximum or agreed order amount |
| Payment terms | Records when payment is expected |
| Quote/reference | Connects the PO with a supplier quotation or project |
| Approval | Shows that the purchase has been authorised |
Use a Unique Purchase Order Number
Every PO should have a reference that is easy to search and difficult to confuse with another transaction. A simple sequence such as PO-2026-001, PO-2026-002, and PO-2026-003 can work well for a small business, while larger organisations may incorporate department, branch, or project codes. Whatever system you use, consistency matters more than creating an unnecessarily complicated numbering structure.
Describe Goods or Services Clearly
Avoid descriptions such as “equipment”, “consulting”, or “materials” when a more precise specification is available. Include model numbers, sizes, service periods, project stages, quantities, units, or supplier quotation references where these details will reduce uncertainty. A clear description helps purchasing staff, the supplier, the person receiving the order, and the accounts team understand the same transaction.
State Delivery and Payment Terms
A supplier needs to know where the order should go, when it is required, and whether any special delivery arrangements apply. Payment terms should also be recorded where they have already been agreed, particularly if the supplier expects payment within a specific number of days after issuing a valid invoice. Clear terms reduce the likelihood that the buyer and supplier will make different assumptions later.
How to Fill In a Purchase Order Template
Using a standard process makes purchase orders more reliable than creating each one from scratch. The exact workflow will depend on the size of your organisation, but the following sequence works well for many small and medium-sized businesses. Businesses with stricter controls can add budget checks or multiple approval stages before the PO reaches the supplier.
- Confirm what needs to be purchased. Write down the goods or services, required quantities, specifications, expected delivery date, and business reason for the order.
- Check the supplier’s quotation. Confirm the agreed prices, delivery fees, discounts, VAT treatment, and any important commercial terms.
- Assign the next PO number. Use your normal numbering sequence so the transaction can be traced later.
- Enter buyer and supplier details. Check legal or trading names, addresses, contacts, and the correct delivery location.
- Add every line item. Record clear descriptions, quantities, unit prices, and line totals.
- Calculate the order value. Add the subtotal, applicable VAT, delivery charges, and total authorised value.
- Add terms and references. Include the quotation number, project code, payment terms, delivery instructions, or other important conditions.
- Obtain internal approval. Follow your business’s purchasing limits before committing expenditure.
- Send the approved PO to the supplier. Keep a copy in the business’s purchasing or accounting records.
- Match the later invoice to the PO. Check that the supplier has billed for the correct goods or services, quantities, and prices.
Purchase Order Example for a UK Business
A completed example can make a blank form much easier to understand. The example below shows how a small UK office might raise an order for equipment after receiving a supplier quotation. The figures are illustrative rather than a recommendation for how any particular transaction should be treated for VAT.
| Field | Example |
| Buyer | Northfield Design Ltd |
| PO number | PO-2026-0148 |
| Order date | 12 September 2026 |
| Supplier | Workspace Supplies Ltd |
| Delivery address | 22 Market Street, Leeds, LS1 4AB |
| Required date | 18 September 2026 |
| Quotation reference | WS-8842 |
| Payment terms | 30 days from valid invoice |
| Requested by | Operations Team |
| Approved by | Finance Manager |
| Description | Qty | Unit Price | Net Total |
| Ergonomic office chair | 4 | £180.00 | £720.00 |
| Monitor stand | 4 | £45.00 | £180.00 |
| Cable management kit | 4 | £20.00 | £80.00 |
| Subtotal | £980.00 | ||
| VAT at 20%, for this example | £196.00 | ||
| Total | £1,176.00 |
The UK standard VAT rate is currently 20% for most goods and services, although reduced, zero-rated, and exempt treatments can apply depending on what is supplied. A template should therefore allow the correct rate to be recorded rather than automatically assuming that every purchase attracts standard-rate VAT. GOV.UK provides the current VAT rates and categories businesses should check when the tax treatment matters.
Purchase Order vs Invoice: What Is the Difference?
A purchase order and an invoice can contain similar descriptions, prices, quantities, and business details, but they are created by different parties for different purposes. The buyer normally raises the PO to authorise a purchase, while the supplier raises an invoice after supplying goods or services in order to request payment. Mixing the two documents can create accounting problems because a PO does not, by itself, replace the supplier’s invoice.
| Purchase Order | Invoice |
| Usually created by the buyer | Usually created by the seller |
| Raised before or when ordering | Raised when payment is requested |
| Authorises or records expenditure | Requests payment |
| Uses a PO number | Uses an invoice number |
| States what the buyer is ordering | States what the supplier is charging for |
| Helps control purchasing | Supports accounts payable and supplier payment |
| Is not itself a VAT invoice | May be a VAT invoice if requirements are met |
For a fuller explanation of the second document in this process, Magzonia’s guide to what an invoice is covers invoice purposes, components, payment terms, and financial record-keeping. Reading the two topics together makes the sequence clearer: the buyer orders first, the supplier fulfils the order, and the supplier then invoices for payment. The PO number can provide the reference that connects these stages.
Does a Purchase Order Need VAT?
A purchase order can show the anticipated VAT treatment and estimated VAT amount, particularly where the buyer needs to understand the total value being authorised. However, the PO should not be treated as a substitute for a valid VAT invoice, because HMRC’s VAT rules place specific requirements on invoices used as evidence for VAT accounting and recovery. HMRC states that a business generally needs valid purchase invoices when reclaiming input VAT, rather than relying on a pro-forma invoice, statement, or delivery note.
For a full VAT invoice, HMRC requires details including a unique sequential invoice number, supply date, date of issue, supplier name and address, VAT registration number, customer details, description, quantity or extent of services, applicable VAT information, and totals. Those requirements apply to VAT invoices rather than defining the mandatory layout of an ordinary commercial PO. Keeping that distinction clear prevents a useful purchasing document from being mistaken for the tax document that supports the VAT claim.
If your organisation is VAT registered, design the purchase order template to record expected VAT where useful, but still require the supplier to provide a valid invoice. Finance staff should check the invoice against the PO and the goods or services actually received before approving payment. This approach creates a stronger audit trail than relying on any one document in isolation.
Purchase Order Template in Word, Excel or PDF: Which Is Best?
The best file format depends on how frequently your business raises purchase orders and how much automation it needs. A very small business making occasional orders may be perfectly comfortable with Word, while an organisation creating many POs may benefit from spreadsheet formulas or dedicated purchasing software. PDF is usually more useful as the final document sent to a supplier than as the master template used for editing.
| Format | Best For | Main Advantage | Main Limitation |
| Word | Occasional POs | Easy to edit and brand | Totals normally need manual checking |
| Excel | Regular small-business orders | Formulas can calculate totals | Layout can be altered accidentally |
| Google Docs | Teams needing shared editing | Easy collaboration | Limited automatic calculations |
| Google Sheets | Shared purchasing logs | Formulas and live collaboration | Needs careful permissions |
| Sending final approved PO | Fixed professional layout | Less convenient for editing | |
| Purchasing software | Higher PO volumes | Approval and tracking automation | May involve subscription or setup costs |
For many SMEs, an Excel or Google Sheets master combined with a final PDF provides a practical starting point. Formulas can calculate line values and totals, while the PDF prevents the supplier-facing version from changing accidentally after approval. As order volumes grow, accounting, ERP, or procurement software may provide better control over numbering, approval limits, supplier records, and invoice matching.
How to Set Up a Simple Purchase Order Process
A template is most useful when it supports a consistent process rather than acting as an isolated form. Decide who can request purchases, who can approve different spending levels, and who is responsible for sending the final PO to suppliers. Employees should also know what happens when the supplier changes a price, quantity, Specification, or delivery date after the original order has been approved.
A basic purchasing workflow can look like this:
- Employee identifies a purchasing need.
- Supplier quotation or price is obtained.
- Purchase request is checked against budget.
- PO is created with a unique number.
- Authorised person approves the order.
- PO is sent to the supplier.
- Goods or services are received and checked.
- Supplier invoice is matched to the PO.
- Discrepancies are resolved before payment.
- PO, invoice, and related records are stored together.
Larger organisations often formalise this into a three-way matching process involving the purchase order, evidence that the goods or services were received, and the supplier invoice. Even a smaller company can use the same principle without complicated software by checking that all three tell the same story before authorising payment. The purpose is not to create paperwork for its own sake, but to prevent unauthorised spending, duplicate payments, and disputes over what was originally ordered.
Common Purchase Order Mistakes to Avoid
Many PO problems stem from missing or vague information, not the document’s design. A beautiful form will not help if the wrong supplier, delivery location, quantity, price, or order reference is entered. Review the commercial details before approval and make sure employees understand that changing an approved PO may require a documented amendment.
Common mistakes include:
- Reusing the same PO number for different transactions.
- Leaving descriptions too vague to identify the order.
- Omitting an agreed quotation or project reference.
- Sending the PO to the supplier before internal approval.
- Using an outdated supplier price.
- Forgetting delivery costs when calculating the authorised value.
- Automatically applying 20% VAT to items with different treatment.
- Failing to update the PO when the supplier agrees a material change.
- Paying an invoice without checking it against the order.
- Keeping POs in individual inboxes rather than a searchable company system.
Version control becomes particularly important when a supplier changes the scope or value of an order. If the authorised amount rises from £2,000 to £3,500, for example, simply changing the spreadsheet without retaining an audit trail can make later review difficult. A revised PO number, amendment record, or controlled approval history can show who accepted the change and when.
How Long Should You Keep Purchase Orders?
HMRC takes a broad view of business records for VAT purposes and specifically lists documents such as orders, delivery notes, purchase books, purchase invoices, and relevant business correspondence among records that may form part of a business’s record trail. VAT-registered businesses generally need to keep VAT records for at least six years. However, other tax, legal, contractual, or operational reasons can affect how long particular documents should remain available. Businesses should therefore create a retention policy that reflects the records they actually hold and the reasons for keeping them.
Digital storage can make purchase orders easier to retrieve when a supplier query, audit, invoice dispute, or internal review arises. Store the PO with related quotations, approvals, delivery evidence, correspondence, and invoices where practical, using consistent file names or searchable references. Magzonia’s guide to business document storage explains how UK organisations can think about retention, access, security, digital records, and archiving.
New businesses should establish this process early rather than waiting until invoices and supplier emails are spread across several accounts and devices. Magzonia’s guide to registering a business provides broader context for setting up basic business administration. A straightforward purchasing and filing system can then grow with the company instead of needing to be reconstructed later.
Final Thoughts
A practical purchase order template does more than make an order look professional; it creates a consistent record of what the business approved, what the supplier was asked to provide, and how much the organisation expected to spend. Include a unique PO number, clear line items, supplier and delivery details, agreed prices, appropriate VAT information, payment terms, and approval details, then match the eventual invoice against the order before payment. Once the process becomes routine, even a simple Word or Excel template can give a UK small business much stronger control over purchasing and supplier records.
Frequently Asked Questions
Is a purchase order the same as an invoice?
No, a purchase order and an invoice serve different purposes. The buyer normally raises a purchase order to authorise or document what it wants to buy, while the seller issues an invoice to request payment for goods or services supplied. The two documents should usually reference the same transaction, and many businesses ask suppliers to quote the PO number on their invoice.
Is a purchase order legally binding in the UK?
A purchase order can form part of a binding commercial agreement. Still, its legal effect depends on the circumstances, including the terms used, supplier acceptance, any quotation or contract already in place, and the parties’ communications. Businesses should therefore avoid assuming that a PO is merely an internal administrative form with no contractual significance. For significant or unusual purchases, properly drafted commercial terms and appropriate legal advice may be more important than the template itself.
Can I make a purchase order in Excel?
Yes, Excel is particularly useful when a business wants formulas to calculate quantity multiplied by unit price, VAT, subtotals, and final totals. You can also keep a separate PO log showing the order number, supplier, date, value, delivery status, and invoice status. Protecting formula cells and using a consistent master version can reduce accidental changes.
Do small businesses need purchase orders?
There is no universal rule requiring every small UK business to issue a purchase order for every commercial purchase. Even so, POs can be valuable when several people buy on behalf of the business, suppliers offer credit terms, orders involve large values, or finance staff need proof that spending was authorised. A simple process can provide many of the control benefits without introducing complicated procurement software.
What is the difference between a purchase requisition and a purchase order?
A purchase requisition is normally an internal request asking the business for permission to buy something, while the purchase order is the document created after that request has been approved and is then sent to the supplier. The requisition therefore supports internal approval, whereas the PO communicates the authorised order externally. Very small businesses may not need a separate requisition stage, but larger teams often use both documents to maintain spending controls.
Should a supplier put the PO number on its invoice?
If your business requires PO-based purchasing, asking suppliers to quote the purchase order number on their invoice makes matching and approval considerably easier. Some organisations make this a formal payment requirement, and UK government bodies including the Home Office and DWP instruct suppliers to include valid PO numbers on relevant invoices. Your own company should communicate its invoicing rules clearly before the supplier submits a bill.
