How to Write a Complete Purchase Order Letter in 7 Simple Steps

A purchase order letter is a formal commercial document sent by a buyer to a supplier or vendor to request a product or service. It signals the seller to ship the goods or start the agreed upon work.

Learning how to properly write a purchase order letter is an important business writing skill, This comprehensive guide will teach you how to craft an effective purchase order letter to initiate purchases and sales

What is a Purchase Order Letter?

A purchase order letter serves several key purposes in a business transaction between a buyer and seller:

• It formally authorizes the seller to ship requested merchandise or deliver services.

• It outlines the exact items or services being purchased along with all relevant specifications.

• It confirms the agreed upon prices, quantities, delivery dates, payment terms, and other details negotiated between the buyer and seller.

• It creates a legal record of the order and provides documentation for accounting, inventory tracking, and quality assurance.

Overall, the purchase order letter acts as the official notice to proceed with fulfilling the order based on all expectations outlined in the letter.

When is a Purchase Order Letter Used?

A buyer sends a purchase order letter anytime they want to buy products or services from a supplier. Common examples include:

• Buying inventory from a wholesaler to stock a retail store.

• Purchasing raw materials from a manufacturer to build products.

• Ordering merchandise to offer for sale in a catalog or online store.

• Contracting work from a vendor like marketing services, software customization, construction, etc.

The purchase order letter should be sent after verbal agreements and negotiations have been finalized. This formal written notice then locks in the specifics.

Purchase Order Letter Format and Template

A purchase order letter generally follows a standard business letter format. This ensures the document is presented professionally.

Here are key elements to include:

• Header with buyer’s company name and address
• Supplier name and address this is being sent to
• Order date
• Formal greeting addressed to contact person at the supplier
• Paragraphs detailing the order (see content tips below)
• Closing statement such as “Thank you”
• Signature of authorized buyer

This sample template illustrates the standard purchase order letter format:

[Company Letterhead]

[Date]

[Supplier Name]
[Supplier Address]

Dear [Contact Name],

This letter serves as a formal purchase order for the goods and/or services agreed upon in our recent discussions. Please refer to the following details:

[Item/service descriptions, quantities, unit costs]

[Payment terms and account information]

[Requested delivery location and date]

[Special instructions or terms/conditions]

Thank you for your prompt attention to fulfilling this order. Please contact me directly with any questions or concerns. We look forward to continuing to do business with you.

Sincerely,

[Your name]
[Your title]

How to Write an Effective Purchase Order Letter

Follow these 7 tips when drafting the perfect purchase order letter for your business needs:

1. Use the Supplier’s Full Legal Name

Write the supplier’s complete legal name and address in the header exactly as it appears on contracts and invoices. This prevents confusion over abbreviations or shorthand names.

2. Specify Products/Services Ordered

Clearly identify each item or service being ordered. Include all relevant details like:

• Item descriptions and identifying product numbers
• Quantity being purchased
• Unit cost agreed upon
• Other specifications discussed with the supplier

Provide enough clarity so the seller can fill the order accurately.

3. Outline Delivery Details

Specify logistics like:

• Requested delivery date
• Shipping method (ground, air, freight, etc.)
• Complete shipping address

This ensures the order arrives when and where expected.

4. Define Payment Terms

Detail how and when payment will be made such as:

• Deposit amount being paid upfront as a down payment
• Payment schedule for progress installment invoices
• Final payment amount and due date upon delivery

This aligns both parties on financial expectations.

5. Note Any Special Instructions

List any other special terms the supplier should be aware of, like:

• Quantity break discounts
• Product packaging requirements
• Branding specifications
• Required compliance documentation

Specifying these upfront prevents misunderstandings.

6. Establish Terms and Conditions

Reference any signed contract governing the work. Or list basic terms and conditions such as:

• Cancellation or refund policies
• Warranties covering defects
• Liability and indemnities
• Confidentiality and intellectual property ownership

This protects your legal rights and remedies.

7. Proofread Carefully

Be sure to carefully proofread the final purchase order letter before sending it. Double check:

• All product details, pricing, and quantities are accurate
• Delivery specifics match prior discussions and quotes
• Payment terms align with budgets and invoicing needs
• There are no typos or formatting issues

Mistakes in written purchase orders can create problems later when fulfilling the order.

Purchase Order Letter Samples and Examples

Here are two sample purchase order letters showcasing how to format the letter and detail the required information.

Sample 1 – Ordering Inventory Merchandise

ABC Corporation
123 Main Street
Anytown, USA 12345

October 15, 2022

Wholesale Supplies Inc.
456 Industry Way
Anytown, USA 54321

Dear Jane Doe,

This letter serves as a formal purchase order for inventory merchandise per our recent discussions. Please refer to the following details:

• 75 units of product SKU 192938 at $5.50 per unit
• 100 units of product SKU 183948 at $9.25 per unit

Please divide the order into two equal shipments for delivery on 10/28/22 and 11/30/22. Ship via UPS Ground to:

ABC Corporation
345 Commerce Blvd.
Anytown, USA 12345

I have enclosed a check for 50% down payment on the total order value. The remainder will be paid within 30 days of delivery.

Thank you for your prompt attention to fulfilling this order. Please contact me if you have any questions.

Sincerely,

John Smith
Purchasing Manager

Sample 2 – Ordering Marketing Services

XYZ Company
789 Industry Drive
Mytown, USA 67890

September 1, 2022

Creative Marketing Agency
1234 Digital Lane
Mytown, USA 67890

Dear Michelle Green:

This letter serves as a formal purchase order for the social media marketing services we discussed for launching our new product line. Please refer to the following details:

• Social media strategy development
• Copywriting and content creation for 10 social posts/month for 3 months
• Community management and post engagement for 3 platforms

Total service cost: $5,000

Please begin services on 9/15/22. Invoice 50% upfront, 25% at 30 days, and final 25% upon completion.

Regards,

Lisa Chen
VP of Marketing

Key Takeaways

• The purchase order letter serves as the official notice to proceed with an order for goods or services.

• It should follow a standard business letter format clearly detailing all expectations and terms of the order.

• Carefully proofread the finished letter before sending to prevent mistakes.

With this comprehensive guide, you should now feel confident writing professional purchase order letters that get suppliers started on fulfilling your business orders.