What is the difference between purchase order and sales order?
These two terms are quite common in procurement and many people tend to get confused when it comes to their usage and meaning.
The article provides the core difference between purchase orders and sales orders in a tabular form. Let’s find out more about the topic.
What is a Purchase Order?
Purchase order refers to the written commercial document issued by the buyer to the seller indicating the types, quality, quantity, prices, and terms of products to be delivered.
Main Content of Purchase Oder
- Order number and date
- Name of supplier and address
- Material code and material description
- The quantity of material and price
- Place of delivery and terms of payment
What is a Sales Order?
Sales order refers to the written commercial document used for the confirmation of goods and services offered. It is normally issued by the seller to the buyer.
Main Content of Sales Order
- Order number
- Date of delivery
- Name and address of the customer
- Material code and material description
- Price and taxes
- Place of delivery and terms of payment
Comparison Chart: Purchase Order Vs Sales Order
| Basic Terms | Purchase Order | Sales Order |
| Meaning | Refers to a document used for making orders for products | Refers to a document used for confirming the sale of products |
| Prepared by | The buyer to the seller | Issued by the seller to the buyer before delivery |
| Effect of Acceptance | Result in a contract between the buyer and a seller | Approves the sale |
Core Differences between Purchase Order and Sales Order
- Purchase order refers to a commercial document that outlines the orders made for products whereas a sales order is a document confirming the sale of the product
- The purchase order is authored by the buyer while the sales order is authored by the seller
- The nature of purchase order is binding whereas that of sales order approves sales
- Purchase order shows the number of items ordered by the buyer whereas sales order shows the confirmation of sales
Core Similarities between Purchase Order and Sales Order
- Contain details of products and services
- Both are written commercial documents
- Used by both the seller and buyer
Comparison Video
Summary
The core difference between the purchase order and a sales order is that a sales order is meant to approve sales whereas a purchase order to show the number of products ordered by the buyer.