How do you process a purchase order?
Written by Shivangi Singh, Senior Content Writer · October 17, 2026
The flow
- Requisition. Someone raises a request with the item, quantity, need date and cost centre. The budget owner approves it.
- PO creation. Procurement converts the requisition into a purchase order, taking the supplier and price from the contract or sourcing result.
- PO approval. Routed by value and category to the authorised approvers.
- Dispatch and acknowledgement. The PO is sent to the supplier, who confirms price, quantity and delivery date. Any change is agreed before shipment.
- Receipt. Goods or services are received and checked; a goods receipt note is recorded against the PO lines. Shortages and damage are logged.
- Invoice. The supplier invoices with the PO number on it.
- Three-way match. Accounts payable compares invoice, PO and receipt. Matches within tolerance are approved automatically; exceptions go to the buyer.
- Payment on the agreed terms, and the PO is closed.
Where it goes wrong
POs raised after the goods arrive, prices typed by hand, receipts not recorded, and invoices without PO numbers. Each creates an exception that someone has to chase.
Making it faster
Automate requisition-to-PO from catalogues and contracts, enforce no PO no pay for covered categories, and let the system handle the matching. The buyer's time then goes to exceptions and suppliers, not data entry.
Shivangi is a Senior Content Marketer specializing in B2B SaaS, procurement, and enterprise technology. She creates research-driven content that helps procurement leaders and business decision-makers navigate AI, digital transformation, sourcing, and spend management. Her work focuses on turning complex industry developments into clear, practical, and actionable insights.