4 purchase order templates in Excel (and how to create)

By Indeed Editorial Team

Published 11 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Purchase orders are a useful document for business owners to use as a way to track, streamline and process purchases. Every purchase order includes a unique identifier known as a purchase order number to effectively track payments for both the buyer and seller. You can create your own purchase order templates in Excel to effectively outline things like the type of goods or services purchased, the quantity, prices and delivery dates. In this article, we review how to create a purchase order template in Excel and discuss other important aspects of purchase order creation.

What is a purchase order?

A purchase order, sometimes known simply as a PO, is a formal document that companies provide to other businesses that have rendered services, goods or other products. Purchase orders are a confirmation that one company intends to purchase something from another company. It's a legally binding document once the selling entity accepts the purchase order and is essentially a promise that the buyer intends to purchase something from a seller, who promises to fulfil the order.

Purchase orders help companies keep records of business transactions and create legally binding paper documents. A purchase order usually contains a number of key details about the transaction, such as:

  • the date of purchase

  • the name of the product or service

  • the quantity or volume of the product purchased

  • product codes or model numbers

  • any terms of payment for the sale

  • billing address details

  • shipping address details

  • a unique purchase order number

Related: How to create a purchase order form (step-by-step guide)

Types of purchase order templates in Excel

There are many different purchase order templates in Excel you can create. Here are four types of purchase order templates to consider using for tracking business transactions and company orders:

Standard purchase orders

Standard purchase orders are probably the most common type of purchase order and they're used for individual purchases. They're also the most straightforward form of purchase order that includes information about the order. When creating this type of purchase order in a template, try to include information about the goods or services purchased, quantities ordered, expected delivery dates, total costs and the terms of payment.

Related: How to invoice a company in 7 steps (plus benefits)

Blanket purchase orders

Companies typically use blanket purchase orders when negotiating for discounts on repeat orders as it allows for use of the same purchase order. Normally, the buyer lists all of the products they want and their quantities without including a price. When the seller includes the price, they usually apply a discount to reward the repeat business.

Contract purchase orders

A contract purchase order is a formal purchase order used by buyers if there are any grey areas in terms of the products or services they order. Contract purchase orders are legally binding when the seller agrees to the terms of the order. It's usually signed in advance and has a set period of time for the buyer time to decide on exact products and quantities in the future.

Planned purchase orders

Organisations use planned purchase orders for long-term agreements between a buyer and seller. With this type of arrangement, buyers agree to buy specific products or services from a supplier. Buyers establish future needs before negotiating the terms with the seller. Things to discuss include delivery dates, pricing, quantities of items and payment terms.

Related: Packing slip: definition, elements, benefits and FAQs

How to create a purchase order template in Excel

Learning how to create a purchase order template in Excel can help you quickly develop POs for an organisation. If you've worked with Excel before, then it's a familiar setup that uses the cells of the spreadsheet to create various categories for the purchase order. There are several pre-made templates available for you to use, customise and populate for your own use. Here are some steps you can follow to create a purchase order template when using Excel:

  1. Open the Excel spreadsheet application on your device.

  2. Create a new blank spreadsheet document in Excel.

  3. Select the 'New' tab, often found in the upper left corner of the screen.

  4. Search for invoice templates in the search bar.

  5. Select the template you wish to use for your purchase order.

To create your own customised template, you can select the blank template option and include specific information for your own purchase order. You have the option to make a variety of purchase orders here, including a blanket purchase order or a planned purchase order.

Related: What is a purchase order? (With four different types)

Common sections in purchase order templates

There are a number of different sections you might expect to find in a purchase order template depending on the type of purchase order and its purpose. There are also several sections that are frequently found in a purchase order template, such as:

  • Header: The header is where you include important company information. This includes things like the name of the company, the address, company branding, the purchase order number and purchase order date.

  • Supplier information: This includes information that's in relation to the contact information for vendors and suppliers. It's normal to include the vendor or supplier's name and address here.

  • Ship to: This section outlines the delivery details for the order. Some details often listed in this section include expected delivery dates, delivery methods, delivery instructions and any important delivery terms.

  • Order details: This is information specific to the order and includes items like the names of products ordered and any unique codes or identifiers, like product colour or variation. Other items might include order quantities and price per unit.

  • Order summary: This is a brief description of the total order that includes purchase order information, subtotals, total costs, tax considerations and delivery fees. It can also include details about any applicable discounts or sales prices.

Information to record in a purchase order template

Purchase order templates are a useful way to populate purchase orders with the right fields to make it easier to create working purchase order documents. Although all purchase orders contain unique information about a sale, they tend to include the same type of information in a few areas. Now you've created your basic template, some important details to incorporate in a purchase order template include:

  • Purchase order issue dates: This indicates when the purchase order is valid and when the order was initially requested.

  • Company branding: This includes information like the business name and accompanying logo, which helps to identify different companies and suppliers.

  • Unique identifiers: Including things like model numbers of stock keeping units (SKUs) adds extra detail to the order and ensures the right items or services go to the buyer.

  • Contact information: This is to make sure communication goes to the right parties, such as order confirmations or delivery updates.

  • Billing address: This is another piece of contact information that ensures the items are going to the right address.

  • Purchase order number: This is a unique number to identify the order and helps with tracking and recording sales and purchases.

  • Shipping method information: This typically includes the delivery address and preferred method of delivery, such as a courier or signed delivery.

  • Billing information: This is to show where the seller sends their invoice after the order is complete.

  • Product or service information: This is information about the product or service and confirms the correct product or service goes to the buyer.

  • Subtotal: This is the total amount of products or services requested by the buyer.

  • Discounts: This denotes any discounts or offers included in the sale.

  • Payment terms: This shows what the buyer pays and when the payment goes ahead according to the terms of the contract.

Related: What is a vendor? (Plus types and selection process)

Purchase order vs. invoice

Purchase orders and invoices have several similarities but have different uses. Invoices are official documents that a seller issues to a buyer to ask for payment for goods or services rendered. It's normally issued once the order is successfully fulfilled and the buyer has the items. It's a useful way to show the buyer how much to pay and when to make the payment.

The major difference between a purchase order and an invoice is that invoices go to the buyer after the goods or services reach them. Purchase orders come from the buyer and go to the seller when goods or services are still in the purchasing process. Purchase orders control items like overstock, while invoices prevent overpayments or duplicate orders. Purchase orders help with tracking for the buyer, while invoices specify pricing and tax. An invoice is a validation of a sale, while a purchase order describes the terms of a sale.

Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.

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