S.R.

LUTHRA INSTITUTE OF MANAGEMENT

ORDER AND REPLY

Prepared By :
Nirag Shah(29)
Chintu Dadhaniya(63)
Hemil Shah(28)
Dhiren Chaudhari(7)
Hemang Chavada(61)
Brief Overview

• What is Purchase Order ?

• Purchase Order Guidelines

• How to write Purchase Order?

• Example 1

• Example 2

• Benefits of writing Purchase Order

 PURCHASE ORDER

“A purchase order (PO) is a commercial document issued

by a buyer to a seller, indicating types, quantities, and
agreed prices for products or services the seller will
provide to the buyer.”

• Sending a Purchase Order to a supplier constitutes a legal

offer to buy products or services.
A Purchase Order Letter should be written as soon as the decision for the purchase has
been made.

 The company with whom the order is being placed should be given enough time to
execute the order.

Business to Business and professional purchasing it is very important that the purchase
order is in writing and contain the information that could be needed to avoid disputes later
on.

Basically a purchase order at least should contain the following:

- The name of the seller
- The name of the purchaser
- Delivery address
- Invoice address
- Price and quantity of the product or products
- Delivery date
- Terms of payment
- Terms of delivery
REPLY

• supplier is giving reply by writing purchase order acceptance or purchase

order agreement letter.

• After the acceptance from the seller of the purchase order, there is a
contractual agreement between the buyer and the seller.

• That's why it is so important that the acceptance should be confirmed by

writing.
 PURCHASE ORDER GUIDELINES

•Purchase Order Number(PON) ,Date: A purchase order number is the one reference point common
to the departmental purchasing, and the supplier, and is an effective tool for tracking the purchase from the
ordering through payment processes. The purchase order date is the date the purchase order was created.
Every Purchase Order must contain Purchase Order Number and Date.

•Supplier Number, Name and Address (FAX if available) : This area includes the supplier
number plus the supplier's complete address and FAX number. If the purchase order is to be mailed this is
the address where it will be sent.

•Ship-to Address : This is the address where the supplier will ship the ordered goods or where service
will be provided. It includes, street and city address, room number, and the name of the person receiving
the order/service.If text appears above the purchase order number, it shows how the supplier was notified
about this order. If this area is “blank” the Purchase Order will be mailed or FAXed to the supplier.
 Continue..

•Buyer & Currency Information :The buyer who issued this purchase order along with
their corresponding contact information. Currency information shows the currency this
purchase order is being issued against.

•Invoicing Instructions :This is the address where all invoices against this order are to be
sent for payment.

•Body of the Purchase Order :This area contains the detailed information of the
goods/services being ordered. Each line item specifies quantity, unit of measure, catalog
number, description, unit price and extended price of the good or service being ordered.

•Total PO Amount :This is the total of all line items (extended price) being ordered.

•Buyers Signature :This is the signature of the person at Tufts (Buyer) that is authorized
to commit University funds for this order.
 FORMAT
PURCHASE ORDER
[Buyer Information] [Date ]
[Buyer Name] [Purchase order number ]
[Buyer Address]
[Buyer Contact Details]
[Fax]

[Supplier Information]
[Supplier No]
[Supplier Name ]
[Supplier Address]
[Supplier Contact Details]
[Fax]

[BODY]

……………[DESCRIPTION]………….

[CLOSED]
 PURCHASE ORDER
Garden Silk Mills Ltd. Date : 28-10-2010
JCP:CP Location Purchase order number : 12111988
Jolwa, Palsana
Surat.
Ph-02622-272748/56
Fax-02622-272743
CST NO: 24721700142(DT 07-11-1981)
GST NO: 24221700142(DT 01-07-2002)

Supplier :[109279-SRT]
R.K.Engineering Corporation
Road No 10,Sitaram Mill,
Udhyog Nagar,
Udhna, Surat.

Dear Sir,
Please supply the following Items to address above and indicate Purchase Order No. & Item code in your delivery
challan, invoice & related correspondences.

Sr. No Item Item Name Qty Price Amount Delivery Date

Code
1 0G070 Bearing 6305z 4 149 596 12-11-2010

2 0G071 Bearing 6305y 10 500 5000 12-11-2010

Prepare By: Checked By: For,Garden Silk Mills Ltd.

Hemil Shah Chintu Dadhaniya Nirag Shah
Authorised Signatory
 REPLY
TO
The Purchase Manager
Garden Silk Mills Ltd.
JCP:CP Location
Jolwa, Palsana
Surat.
Ph-02622-272748/56

Our Purchase Order No: RK/GS/147

Dear Sir,
We thank you for your new order, Accordingly we quote as under.

Sr. No Item Code Item Name Qty Price Amount

1 0G070 Bearing 6305z 4 149 596

2 0G071 Bearing 6305y 10 500 5000

Total 5596

We will send your order(PON : 12111988) at 12-11-2010.Thank you.

Terms and Conditions :
Tax : 5% vat extra.
Delivery : mentioned above. Your’ s faithfully
Payments : 30 days.
For R.K. Engineering Corporation
Discount : 3% (cash/check payment on delivery date)
F.O.R : Surat Dhiren Chaudhari.
 PURCHASE ORDER
A-One Trading Co. Date : 29-10-2010
Near Parle Point, Purchase Order Number : 121119889

Shiv Chember,
Surat.
Ph-0261-2221441/43
Fax-0261-2221442
CST NO: 24747447471(DT 09-11-1989)
GST NO: 24247447471(DT 01-07-2002)
 
 
Supplier :[909087-LUD]
Kashish Sales(I) Pvt. Ltd.
Miller Ganj, Shakti Market,
Ludhiana.

Dear Sir,
Please supply the following Items to store and indicate Purchase Order No. & Item code in your delivery challan, invoice &
related correspondences.

Sr. No Item Item Name Qty Price Amount Delivery Date

Code
1 CL315 Chain Lock 70 115 8050 12-11-2010

2 SP222 Stand Spring 100 120 12000 12-11-2010

Prepare By: Checked By: For, A-One Trading Co.

Rahul Patel Manoj Sheth Hemang Patel
Authorised Signatory
 REPLY
Dear Sir,
We are in receipt of your order as contained in the attached purchase order form.
We confirm acceptance on said order subject only to the following exceptions:

Sr. No Item Item Name Qty Price Amount

Code
1 CL315 Chain Lock 70 115 8050

2 SP222 Stand Spring 100 120 12000

TOTAL 20050

On exceptions noted, we shall assume you agree to same unless objection is received within ten days of receipt
of this notice.
The items are being sent to the address as mentioned in the letter of order.
Any defects in the items or any problems with the statement of orders must be reported at the earliest.
We are thankful to for the order and pleased to serve you and hope that your association with us will continue in
future also.
Thank you for your patronage.

Terms and Conditions :

Tax : 5% CST Your’ s faithfully
Delivery : mentioned above. For R.K. Engineering Corporation
Payments : 15 days.
Ankit Joshi
F.O.R : Surat
Excise : Inclusive only for Spare part
Benefits Of Purchase Order
Time Saving :
The purchase order system offers administrative control to any company. This
system manages what is bought, who it is bought from, and where and when the
product is delivered. Immediate access to this information can save any business
a great deal of time.
Purpose :
A purchase order system is a way to manage a company's total purchases or
services procured. It is used for both operational needs and for raw material
needs.
Management :
A purchase order system prevents duplication of purchases. The right purchase
order system allows management to track purchases and make better purchasing
decisions based on a company's needs and policies.
CONTINUE…..

Function
Using a system such as this offers effective and accurate reports containing
information such as place of purchase, delivery of the product and vendor
payment information. This makes managing product and vendor information
much easier, and it is especially helpful for products not bought on a continual
basis.
Inventory Control
A good purchase order system allows management to easily decide how much
inventory should be kept on hand. Adequate inventory control helps prevent
economic losses.
Increase Revenue
Purchase order systems contain a great deal of information that helps a
company determine its overall operational and manufacturing costs. With this
information, the business can make important cost-cutting decisions that will
create more revenue and fewer unnecessary expenditures.
Thank You