A purchase order template gives you a written record of what you have asked a supplier for before any money changes hands. In this UK Excel template, add the supplier, the items and the date you need them, choose the VAT rate the supplier will charge and the delivery terms, and the net, VAT and order total calculate automatically.
When should a small business use purchase orders?
You do not legally need a purchase order, but it helps whenever more than one person buys for the business, an order is large, or goods are coming from abroad. Matching the supplier’s invoice to your PO before you pay catches wrong prices, short deliveries and duplicate bills.
The VAT column lets you predict what the supplier’s invoice will show. If they are not VAT-registered, leave VAT % blank and the order total is simply the net amount.
Which delivery terms should I pick?
For UK orders, most buyers choose “Delivered to our address” or “Collected by us”. If you buy from overseas, the Delivery Terms list includes four common Incoterms, which say who arranges transport and who pays import costs:
| Term | What it means for you as the buyer |
|---|---|
| EXW (Ex Works) | You collect from the supplier’s premises and handle everything from there |
| FCA (Free Carrier) | The supplier hands the goods to your carrier at an agreed place |
| DAP (Delivered at Place) | The supplier delivers to you; you pay import duty and VAT |
| DDP (Delivered Duty Paid) | The supplier delivers and pays the import duty and VAT |
Keeping your purchase records together
Save each PO under its number alongside the supplier’s invoice and delivery note. Those documents back up the costs in your bookkeeping. If you are self-employed, see Making Tax Digital for sole traders for how your expense records will feed quarterly updates to HMRC.
