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Purchase order
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A purchase order (PO) is a
Contents
Background
There are several reasons why companies use purchase orders.
Purchase orders allow buyers to clearly and explicitly communicate their intentions to sellers, and sellers are protected in case of a buyer's refusal to pay for goods or services. Purchase orders also help a purchasing agent manage incoming orders and pending orders. Purchase orders also are an economical choice for a business because they streamline the purchasing process to a standard procedure.
Getting financial assistance from commercial lenders or
financial institutions is another reason of using purchase orders. There are various
trade finance facilities that almost every financial institution allow to businessmen against such purchase order such as:
Before Shipment credit facility
Post Shipment credit facility
Trade Finance facility
Foreign Bill Purchase credit facility
Bill retirement credit facility
Electronic Purchase Orders
Many purchase orders are no longer paper-based, but rather transmitted electronically over the Internet. It is common for electronic purchase orders to be used to buy goods or services online for services or physical goods of any type.
See also
Sales order
Blanket order
Purchase requisition
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