At the People’s Fund, a valid purchase order is the first step on the journey to funding entrepreneurs, but, increasingly we are receiving non-valid purchase orders, which we can unfortunately not assist with funding. In this article, we break down purchase orders to help you have a better understanding of them. 

Before we get into it, let’s define some of the terms:

PO: purchase order

Buyer: the end client. The one who issues out the purchase order

Supplier: the entrepreneur. The one who the purchase order is awarded to

Purchase Orders Explained

Simply, a purchase order is a legally binding document sent by a buyer to a seller requesting products or services. Often referred to as ‘PO’s’, they outline the delivery date and terms of payment that the buyer must adhere to and also detail the items the buyer wishes to purchase and clearly state the price.

Purchase orders include key reference information such as tracking numbers (to track the purchase order as it moves through the supplier’s system), as well as information about the type of item/items ordered, the quantity ordered, and the agreed-upon price.

All purchase orders should contain the following information:

  • Date of issue
  • Purchase order number
  • Details of goods
  • Shipping details
  • Name and address of the buyer
  • Name and address of the seller
  • Terms and conditions of the sale

Invoices vs Purchase Orders

A common error made by many entrepreneurs is mistaking an invoice for a purchase order. It’s quite an easy mistake to make. Both are legally binding financial documents exchanged between sellers and buyers. It is important to note that a purchase order is often used to create an invoice, however, each document is used at a different point in the buying process. Purchase orders and invoices are also used by different people within the business.

In other words, a purchase order is used by a buyer to place an order and is issued before delivery.

An invoice is issued by a seller after an order is delivered. It defines the amount the buyer owes for the purchased goods and the date by which the buyer needs to pay.

Purchase orders:

  • Created by the buyer
  • Created before purchase takes place
  • Details the goods required
  • Includes proposed payment details


  • Created by the seller
  • Created after purchase
  • Confirms goods delivered
  • Requires payment on a specific date

Different Types of Purchase Orders

There are 2 basic types of purchase orders:

Standing purchase orders:

Buyers can create special orders for especially large shipments or recurring purchases. A standing purchase order allows a buyer to purchase the same products many times over using the same purchase order number. This saves time and hassle.

Blanket purchase orders:

A blanket purchase order is an agreement between both parties for multiple deliveries over a set period, for a set price. Blanket orders are usually used between companies with a strong relationship, and sometimes come with discounts or other incentives.


That, in a nutshell, covers the basics of what a purchase order is. Once you have a valid PO, we can start the process of hopefully funding your entrepreneurial dreams.  

To find out more on all things “Purchase Orders”, see our FAQs section –

To apply for funding, head over to our website –

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