11 March 2025
What is a PO number?
4 minutes
A Purchase Order number, also known as a PO number, is a vital identifier linked to a specific purchase. It usually consists of just numbers, a combination of letters and numbers, or with special symbols.
In this useful guide, we’ll tell you everything you need to know about PO numbers. What is a PO number in the UK? Who gives a PO number? Where do I find my PO number? You’ll find answers to all these questions right here.
What is a Purchase Order or PO number?
A Purchase Order (PO) number is a unique code used by the buyer and seller to track an order for goods or services through the purchasing process. You’ll find it on your purchase order document in one of the following formats:
- Numbers (e.g. 001)
- Letters and numbers (e.g. INV001)
- Letters, numbers, and special symbols (e.g. INV-001)
This essential PO number allows either party to search for the purchase order document in their physical or digital filing system quickly, in case they want to check on any of the sales agreement particulars.
For example, a buyer wishing to confirm the expected delivery date could use this reference number over an email to the vendor company. The PO number would then allow the vendor’s representative to consult the right PO document and respond appropriately, regardless if they’re familiar with the order or not.
What is a purchase order document?
A Purchase Order is a document drawn up by a buyer and given to a seller detailing what products the buyer intends to purchase. A PO will also contain information on how many of said products the buyer is ordering and the mutually agreed upon unit price for the items.
Other information typically noted on a purchase order can include:
- Unique PO number
- Buyer and seller information including contact details
- The date the order was made
- Delivery or shipping address details
- Expected delivery date
- Payment terms
- Any additional instructions or customisations
Who gives a PO number?
It's the buyer who creates the purchase order number, as they are the ones generating the purchase order for the commission of goods.
While PO numbers may be assigned manually in smaller companies based on what makes the most sense for the business owner, this may not be practical for bigger organisations. Businesses making a large number of purchases across various employees commonly use accounting systems that automatically generate PO numbers almost instantaneously.
How do I find my PO number?
You’ll usually find the PO number near the top of the purchase order document itself. Although the specific location of the PO number depends on the template used, it’s standard for it to be prominently displayed for easy reference.
A PO number on an invoice will be similarly noticeable, as it's an essential reference on what products or services were agreed upon. It’ll usually appear below or next to the document's invoice number.
What is an example of a PO number?
A PO number can be any combination of letters, numbers and punctuation marks. Smaller businesses may simply start at 001, followed by 002, 003 and so on.
Letters could be added to distinguish between departments, such as S032 for sporting goods or C241 for camping goods. Purchase Orders by date are also common; for example, the first order generated on the 4th of February 2025 may read as PO 04022025/01.
Whatever the convention, PO numbers need continuity across the system for Purchase Orders to be quickly and easily traceable.
Why do you need a PO number?
A PO number is an essential part of a purchase order. It allows both parties to keep track of important details throughout the ordering process.
But what do they mean for both buyer and seller in terms of running their business on a day-to-day basis?
- Because the PO number provides a quick and easily traceable reference within an accounting database, it improves business efficiency.
- PO numbers ensure any queries regarding the agreement can be easily resolved in the case of a dispute.
- PO numbers allow sellers to keep track of inventory while allowing buyers to manage their spending and stay within budget.
- PO numbers prevent incorrect filing and duplicate payments.
- Once accepted by the seller, a Purchase Order becomes a legally binding document. Being able to track these documents through a PO number becomes of vital importance.
- The PO number usually appears on the invoice at the payment stage, allowing both parties to check that the purchase was pre-approved and timely payment terms agreed upon.
What's the difference between invoice number and PO number?
It's easy to confuse the terms invoice number and PO number. Both are document identifiers used to keep track of agreement details during business transactions. However, there are some key differences:
- A Purchase Order is provided by the buyer to the seller and contains important details about the ordering of goods and services. This document's unique PO number helps both parties monitor agreements at the ordering stage.
- An invoice is provided by the seller to the buyer, requesting payment (usually) once goods and services have been provided. It’ll have a specific invoice number that allows companies to specifically track the payment part of a transaction. Invoices are also a legal requirement if both parties are registered for VAT and are a vital part of the accounting and tax system.
Key takeaways: What is a PO number?
PO numbers are more than just a random set of numbers, letters and symbols; they’re unique identifiers that provide a reference for both buyers and sellers for the all-important purchase order. This number can be used to track an order and bring up any details quickly, easily and accurately, as well as prevent duplicate payments and incorrect filing.
Moreover, a purchase order (once accepted) becomes a legally binding document that details the product, quantity, and price of whatever the buyer has committed to buying. Together with the PO number, they reference an essential part of professional business practice.
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