Last updated on Feb 20, 2024

How do you create clear and concise POs to avoid confusion and delays?

Purchase orders (POs) are essential documents for any business that buys goods or services from suppliers. They help you track your orders, manage your inventory, and control your spending. But if your POs are unclear or incomplete, they can also cause confusion and delays in your supply chain. How do you create clear and concise POs that communicate your needs and expectations to your vendors? Here are some tips to help you streamline your PO communication and avoid common pitfalls.

1 Use a standard template

Creating clear and concise POs is made easier with the use of a standard template. This template can help you avoid missing or duplicating details, as well as ensure consistency and accuracy. A typical PO template should include your company name, address, and contact information; the vendor name, address, and contact information; the PO number and date; the description, quantity, price, and total amount of each item or service ordered; the delivery date, location, and method; the payment terms and conditions; and the signature and approval of the authorized person. You can find online templates or create your own using software like Excel or Word. It is important to customize your template according to your industry and business needs while also reviewing it regularly for updates and changes.

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2 Be specific and precise

Another key to creating clear and concise POs is to be specific and precise about what you are ordering and how you want it delivered. Avoid vague or ambiguous terms that could lead to misunderstandings or errors. For example, instead of saying "10 boxes of paper", specify the type, size, weight, and color of the paper. Instead of saying "ASAP", provide a specific date and time for the delivery. Instead of saying "standard shipping", indicate the preferred carrier, tracking number, and shipping cost. The more details you provide, the less room there is for confusion and delays.

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Sachin Sharma

Optimizing Procurement & AP for Growth-Focused CFOs
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Incorporating catalogs into your procurement process further streamlines PO clarity. By pre-defining items with exact descriptions, specifications, and agreed-upon prices, catalogs eliminate ambiguity. This ensures that orders are precise, reducing delays caused by incorrect descriptions or pricing disputes. Utilize catalogs to ensure each PO reflects the exact needs, fostering smoother, faster transactions and deliveries.

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3 Use clear and simple language

A third tip to create clear and concise POs is to use clear and simple language that is easy to understand and follow. Avoid jargon, slang, or acronyms that could confuse or mislead your vendors. Use short and simple sentences and paragraphs that convey your message clearly and concisely. Use bullet points or tables to organize your information and make it easier to read. Use proper grammar, spelling, and punctuation to avoid errors and misinterpretations. Proofread your POs before sending them to ensure they are clear and error-free.

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Sachin Sharma

Optimizing Procurement & AP for Growth-Focused CFOs
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Another way to have clear language is to print the terms and conditions on the purchase order. Adding terms to your Purchase Orders (POs) not only clarifies the expectations between suppliers and buyers but also acts as a safeguard for both parties. It outlines the obligations, including payment terms, delivery schedules, and quality expectations, ensuring there's no ambiguity about the agreement. This step is essential in mitigating risks and avoiding disputes that can arise from unclear agreements.

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4 Communicate with your vendors

A final tip to create clear and concise POs is to communicate with your vendors regularly and effectively. Don't assume that your vendors know your expectations or preferences. Communicate with them before, during, and after the order process to clarify any questions or issues. Confirm that they have received and understood your POs, and that they can meet your requirements and deadlines. Notify them of any changes or cancellations as soon as possible. Provide feedback and appreciation for their service and performance. Communication is key to building trust and rapport with your vendors, and to ensuring smooth and successful PO transactions.

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Sachin Sharma

Optimizing Procurement & AP for Growth-Focused CFOs
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Incorporating standard vendor acknowledgment into your communication process is crucial. It is a formal confirmation, eliminating ambiguity around purchase order status and delivery details. This step ensures that both parties are aligned, reducing errors and delays. Make it a practice to seek acknowledgment upon issuing the purchase order and agreement on delivery timelines. This clarity fosters transparency and streamlines your purchasing process, making it more efficient and reliable. Remember, clear communication is the foundation of strong vendor relationships.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jin (Angela) Cho

CCMC | US Army Veteran
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I would like to add create an effective follow up system that fits to your company. Customers and Vendors should always be on same page.

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How do you create clear and concise POs to avoid confusion and delays?

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1 Use a standard template

2 Be specific and precise

3 Use clear and simple language

4 Communicate with your vendors

5 Here’s what else to consider

Purchase Orders

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