Inventory glossary
What is Purchase order?
A purchase order is a document a store sends to a supplier listing the products, quantities, and prices being ordered.
A purchase order protects both sides of a deal. The store gets a written record of what was ordered and at what cost, and the supplier gets clear instructions on what to ship and bill for. Without one, orders get placed over email or phone calls and details get lost or disputed later.
For a small Shopify store, purchase orders also help with bookkeeping. You can match the purchase order to the supplier invoice and to what actually arrives, so you know if you were overcharged or shorted on quantity. Keeping a record of past purchase orders also makes it easier to track supplier pricing changes over time.
Example
A candle store needs more of its lavender jar candle. The owner creates a purchase order for 120 units at $4.50 each, total $540, and sends it to the wax supplier. The supplier confirms the order and ships it two weeks later. When the boxes arrive, the owner checks the count against the purchase order before paying the invoice.
Common mistakes
- Not including agreed prices on the purchase order, which leads to invoice disputes later.
- Sending orders informally over email with no fixed document, making it hard to track what was actually agreed.
- Forgetting to close or cancel a purchase order after receiving goods, which leaves open orders cluttering records.
Purchase order and SteadyShelf
SteadyShelf drafts purchase orders from its reorder suggestions and emails them to suppliers once you approve them, then lets you receive the stock into Shopify when it arrives.
Work it out for your own products with our free tool: Shopify purchase orders.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Supplier · Lead time · Receiving · Reorder quantity · Case pack
FAQ
Is a purchase order the same as an invoice?
No. A purchase order is sent by the buyer to request goods. An invoice is sent by the supplier to request payment, usually after the order is confirmed or shipped.
Do small stores really need formal purchase orders?
Yes, even a simple one helps. It gives you a paper trail for what you ordered, at what price, and lets you check deliveries against it instead of relying on memory or scattered emails.
Let SteadyShelf do this math for every SKU
Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.
Get early access