What Is the Purpose of Purchase Orders?

By Staff WriterLast Updated Mar 28, 2020 12:44:44 PM ET

Purchase orders authorize vendors to ship products and document the specified price as well as the terms of the purchase. Purchase orders are legally binding documents and require the agreement of both the buyer and vendor in order to change the terms. Often, purchase orders are open ended, allowing a company to order from a vendor as needed at a set price for a specific time frame.