Inventory how-to

How to write a purchase order

A purchase order needs a PO number, supplier details, your shipping address, a line for each SKU with quantity and cost, expected delivery date, and payment terms.

Short answer: A purchase order needs a PO number, supplier details, your shipping address, a line for each SKU with quantity and cost, expected delivery date, and payment terms. Keep the format consistent so suppliers can process it fast and you can match it against what arrives.

What to include

A clear PO has: a unique PO number, the date, your business name and ship-to address, the supplier's name and contact, and one line per item with SKU, description, quantity ordered, unit cost, and line total. Add a grand total, expected delivery or ship date, and payment terms (for example net 30). If the supplier has a minimum order quantity or sells in case packs, order in those multiples so there is no confusion on their end.

Keep quantities tied to real numbers

Base the order quantity on your sales rate, not a guess. Work out your daily sales for the SKU, multiply by lead time plus how many days of cover you want to hold, then subtract what you already have on hand and on order. Round up to the nearest case pack or the supplier's minimum.

Make it easy to match on arrival

Use the same SKU codes on the PO that you use in your store, so receiving stock is a straight match. When stock arrives, check it against the PO line by line, including partial shipments, and note any shortages against the PO number so you know what is still outstanding.

Step by step

  1. List the SKU, description, quantity, and unit cost for each item
  2. Calculate order quantity from daily sales, lead time, days of cover, minus stock on hand and on order
  3. Round the quantity up to the supplier's case pack or minimum order size
  4. Assign a unique PO number and date
  5. Add supplier details, your ship-to address, delivery date, and payment terms
  6. Send the PO to the supplier and keep a copy to match against the delivery
  7. Check received stock against the PO line by line, noting any shortfalls

Worked example

Say you sell a candle that moves 4 units a day on average. Your supplier's lead time is 10 days and you want 7 days of safety stock, and you currently hold 20 units with none on order. Order quantity = 4 x (10 + 7) - 20 = 4 x 17 - 20 = 68 - 20 = 48 units. If the supplier sells in case packs of 12, you round up to 48 units exactly, or to 60 if your true need was slightly higher, say 52.

How SteadyShelf helps

SteadyShelf drafts the PO for you using this same math per SKU, rounds to case packs and supplier minimums, and emails it to the supplier once you approve it. It then lets you receive stock, including partial deliveries, against that PO. It does not handle landed cost or per-location purchase orders, so if you stock multiple warehouses you will still need to split or adjust quantities manually.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

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FAQ

Do I need a different PO format for every supplier?

No. Use one consistent format with the core fields (PO number, SKUs, quantities, costs, dates, terms) and just plug in each supplier's details. Some suppliers may ask for their own PO template, but the same information applies.

What if the supplier only partially fulfills the order?

Receive what arrives against the original PO and leave the rest marked as outstanding. Keep the PO open until the remainder ships or you cancel it, rather than closing it out as if everything arrived.

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.

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