Sales order and purchase orders are essential. Both documents are the most important to avoid mistakes. A purchase order created as a document by the particular company which related with any of the products or services and it should be given in a detailed way regarding how much the company purchased or spent some amount on services. On the other hand, a sales order is a document sent by a company to a customer, confirming the details of the products or services that will be provided, including quantity, delivery time, and terms and conditions.
Difference between Sales Order and Purchase Order
The number of items needed to buy can be listed in the purchase order. A sales order references this purchase order and confirms the details of the sold items. Let’s read about some differences between sales order and purchase order;
| Comparison | Purchase Order | Sales Order |
| Meaning | A written document that gives permission to a supplier to provide specified materials under agreed terms and conditions. | A sales order is a confirmation document issued by the seller to the buyer before delivering the specified goods or services. |
| Who prepares it? | Prepared by the buyer and sent to the supplier. | Issued by the supplier to the buyer before delivery. |
| Effect of acceptance | Make a contract between the buyer and supplier. | Accept the sale. |
| Document | Outside document. | Inside document. |
| Signifies | Thinking of purchasing certain goods and services from the seller. | Agreement to sell some goods and services to the buyer. |
| When it is generated? | Upon acceptance of the seller’s offer, quotation, or proposal. | Upon receiving the purchase order. |
| Objective | To authorize the purchase. | To confirm the sale. |
Definition of Purchase Order
A purchase order is an official document from a company’s purchasing department that authorizes a supplier to provide specific materials at agreed-upon terms and prices. The department purchasing team creates the document and will get a list of approved suppliers. This may be considered a legal contract that must be prepared carefully.
What is a Purchase Order Form (POF)?
The specific supplies received from suppliers can be noted in document form. That is called a purchase order form. It is based on the details in the purchase requisition form, signed by the procurement manager. The Purchase Order Form includes:
- Name and address of the purchasing company
- Name and address of the supplier
- Date of the order
- Payment terms
- Price
- Delivery instructions
- Delivery date
Definition of Sales Order
A Sales Order (SO) is a document used in business to confirm the terms of a transaction. The seller creates it after receiving a purchase order that specifies the product details. This ensures the customer’s request matches the products to be supplied by the seller.
What is a Blanket Order?
A blanket order is when a customer orders a specific amount of a product over a period with pre-agreed terms and conditions.
Purpose of Sales Order
A sales order confirms the supply of goods or services requested for purchase. It shows the buyer has reviewed the items, documents customer needs, and lists order details.
Purchase Orders and Sales Orders Some Differences
Some of the necessary differences between a purchase order and a sales order are given below:
Purchase Order
- A written request to a supplier for specific goods detailing quantity, quality, price, terms, and conditions.
- Issued by the buyer to the seller.
- Creates a binding contract upon acceptance by the seller.
- An external document is used to request goods from the seller.
Sales Order
- A written document confirming the sale of specified goods to a customer.
- Issued by the seller to the customer in response to a purchase order.
- Confirm the sale once the customer accepts the seller’s terms.
- An internal document used for communication within the seller’s organization.
If you want to learn more about purchase orders and sales orders, explore Finprov Learning. We provide comprehensive online accounting courses tailored for accounting professionals, offering various programs. Our classes include CBAT, PGBAT, Income Tax, Practical Accounting Training, PGDIFA, DIA, GST, SAP FICO, Tally Prime, MS Excel, and more. Whether you’re a graduate or a seasoned professional, Finprov’s well-structured accounting courses in Kochi ensure a strong learning journey.
