Purchase Order (PO)
The document committing a buyer to purchase a stated quantity at a stated price on stated terms.
Why it matters
In a wholesale relationship the PO is where the commercial reality lives, quantity, unit price, payment terms and delivery. The term that matters most to a brand's cash position is when payment lands: on issue, on shipment, or net 30/60 after delivery.
In practice
For brands used to retailer terms, upfront payment on the PO is a materially different cash cycle. It removes both the receivables risk and the working-capital gap that normally sits between manufacturing a unit and being paid for it.
Related terms
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