Tracking supplier orders without a documented process creates gaps that lead to overpayments, incorrect deliveries, and GST compliance issues. A purchase order template gives Australian businesses a consistent format to authorise and record every procurement transaction before goods or services arrive.
This guide explains what a purchase order is, what it must include under Australian GST rules, which type suits your procurement scenario, and how to create one from scratch. You can download free purchase order templates in Excel, PDF, and Word at the end of this article.
Key Takeaways
A purchase order is legally binding the moment the supplier accepts it, so accuracy in quantities, prices, and GST details matters before you send it.
GST must be shown as a separate line item on every purchase order raised against a GST-registered supplier, and supplies that are GST-free must be clearly noted.
Choosing the right PO type, whether standard, blanket, planned, contract, or service, depends on your supplier relationship and order frequency rather than the product category alone.
What Is a Purchase Order?
"Our accounts team used to spend hours chasing invoices that didn't match what we'd actually ordered. Once we standardised our purchase orders, the back-and-forth with suppliers dropped off almost immediately. Everything was in writing from the start."
A purchase order (PO) is a formal commercial document that a buyer sends to a supplier to authorise a specific purchase. It documents the agreed items, quantities, prices, delivery expectations, and payment conditions before any goods or services are provided.
A purchase order differs from a verbal or email request because it creates a structured, trackable record of the commitment. Once the supplier accepts the PO, either by confirming it in writing or by beginning to fulfil it, the document becomes legally binding on both parties.
For Australian businesses, purchase orders also support internal financial controls. The accounts payable team uses them to verify supplier invoices through a process called three-way matching, comparing the purchase order, the goods receipt, and the invoice before approving payment.
Purchase Order vs Invoice
A purchase order and an invoice are both transaction documents, but they serve different purposes at different points in the procurement cycle. The table below outlines the key differences.
A purchase order sets the terms before the supply happens. An invoice confirms what was delivered and requests payment. When the invoice matches the original PO, the accounts payable team can approve payment with confidence.
What to Include in a Purchase Order
- PO number: a unique identifier assigned to each order for tracking and three-way matching against supplier invoices
- Date of issue: the date the purchase order was created and sent to the supplier
- Buyer details: the purchasing company's legal name, ABN, address, and primary contact information
- Supplier details: the vendor's legal name, ABN, address, and the name of the contact person or account manager
- Description of goods or services: a specific line-by-line breakdown that includes product codes or a defined scope of work
- Quantity and unit of measure: the number of units ordered and how they are counted, such as units, hours, or kilograms
- Unit price: the agreed price per unit, stated exclusive of GST
- GST amount: a separate line showing 10% GST calculated per item or across the total order value
- Total amount (including GST): the full payable amount after GST is applied across all line items
- Delivery address and delivery date: where the goods should be sent and when they are expected to arrive
- Payment terms: the agreed timeframe for settlement, such as net 30 days from invoice date
- Authorised signatory: the name and signature of the person within the business who approved the purchase
How to Create a Purchase Order
Creating a purchase order follows a clear sequence that covers supplier verification, order detail, GST calculation, and internal approval. The process below applies whether you are working from a free template or a procurement system.
1. Confirm Your Supplier Details and ABN
Verify the supplier's legal business name and Australian Business Number before raising the PO. You can check any ABN free of charge against the Australian Business Register at abr.business.gov.au. Confirming these details at the outset prevents errors that could cause payment or tax compliance issues later.
2. Assign a Unique PO Number and Issue Date
Every purchase order needs a unique reference number. A structured format such as PO-2025-001 makes it straightforward to track open orders and match them against incoming invoices. Record the issue date so both parties have a clear timestamp for the transaction.
3. Describe the Goods or Services in Detail
Write a specific description for each line item rather than using broad terms such as "office supplies" or "IT services". Include product codes, model numbers, or a defined scope of work where applicable. Clear descriptions reduce the risk of disputes when goods arrive or a service invoice is submitted.
4. Calculate and Add GST Correctly
List each item's unit price exclusive of GST, then apply the 10% GST rate to all applicable line items. Show GST as a separate line so the total amount inclusive of GST is transparent to both parties. Where any items are GST-free, note the exemption on the same line.
5. Specify Delivery Details and Payment Terms
Include the full delivery address, the required delivery date, and any handling or packaging instructions. Then confirm the agreed payment terms, for example 30 days from invoice date. Documenting both at the PO stage reduces the chance of disputes after delivery.
6. Obtain Authorisation and Issue the PO
Route the completed PO to the relevant authorised signatory within your business before sending it to the supplier. Internal approval ensures spending is controlled and traceable. Once approved, send the PO to the supplier and retain a copy alongside the delivery records and resulting invoice.
Download Free Purchase Order Templates
The templates below are pre-formatted for Australian GST compliance, including a dedicated GST line item and a total amount inclusive of GST. Each format is ready to use and can be customised with your business name, logo, and branding.
Standard Purchase Order Template (Excel & PDF)
The standard purchase order template includes all core PO fields: PO number, buyer and supplier details, item descriptions with product codes, quantities, unit prices, GST amounts, and the total inclusive of GST. A delivery address field and payment terms line are also included.
This template suits businesses that raise individual purchase orders for specific, fully defined transactions.Free Standard Purchase Order Template
Free Standard Purchase Order Template
Simple Purchase Order Template
The Word version of the purchase order template is designed for businesses that want to quickly personalise the format. You can add your logo, adjust field labels, and update the document styling to match your letterhead.
The content covers all required fields for GST compliance and supplier reference, in the same structure as the standard template.
Free Simple Purchase Order Template
Service Purchase Order Template
The service PO template includes fields for scope of work, agreed rate (hourly or fixed-price), start and completion dates, milestone payment terms, and deliverable descriptions. It is designed for engaging contractors, consultants, and service providers.
This template is available in both Excel and PDF formats.
Blanket Purchase Order Template
The blanket PO Excel template includes an agreement summary section covering the total commitment value, supply period, and supplier details. It also includes a release order tracking log where individual call-off orders are recorded against the blanket total, so you can see your remaining commitment at a glance.
Free Blanket PO Template
Setting Up a PO Approval Workflow
A purchase order template establishes what to document, but an approval workflow determines who can commit spending and at what level. Without a defined process, purchase orders can be raised and sent to suppliers without the right people reviewing them first.
A basic PO approval workflow includes three stages: request, review, and dispatch. The person raising the PO submits the request, a budget holder or finance manager reviews it against available funds, and the approved PO is then sent to the supplier. Purchase orders above a defined value threshold should require an additional level of sign-off.
For small teams, a shared folder and email approval chain can manage the process in the short term. However, as order volumes grow, tracking approval status, following up on overdue sign-offs, and matching each PO against a supplier invoice becomes increasingly difficult to manage manually.
Procurement software automates approval routing, sends notifications to the right people, and provides a full audit trail for every purchase order. HashMicro's procurement software supports configurable approval thresholds, real-time PO status tracking, and automatic three-way matching between purchase orders, goods receipts, and supplier invoices.
Common Purchase Order Mistakes and How to Avoid Them
Errors in purchase orders delay payments, create supplier disputes, and introduce GST compliance risks. The following mistakes are among the most common and can each be addressed with a structured template and a clear internal process.
Vague or missing item descriptions
Writing "supplies" or "services" instead of a specific description creates problems when goods arrive and the invoice doesn't reflect what was ordered. Every line item should include a clear description, quantity, and unit price.
No GST line item
Leaving GST off the purchase order creates a discrepancy when the supplier's tax invoice includes it. Always show GST as a separate line, even when the calculation is straightforward.
Incorrect supplier ABN
A single transposition error in a supplier's ABN can cause problems during BAS reconciliation and input tax credit claims. Verify the ABN at abr.business.gov.au before finalising the PO.
Unspecified payment terms
Purchase orders that don't state payment terms leave both parties with different expectations. Confirm the agreed payment period on the PO so there is no ambiguity when the invoice arrives.
No authorised signatory
A purchase order without a named and approved signatory provides no internal accountability and may not be treated as binding by the supplier. Always include the name of the person authorising the spend.
Raising POs after the fact
Backdating a PO or raising one after goods have already been received removes the document's core purpose, which is to authorise spending before it occurs. Purchase orders must be issued before the order is placed or work begins.
From Manual PO Templates to Automated Procurement
A purchase order template is a practical starting point for any business that wants to bring structure and accountability to its procurement. However, as supplier relationships grow and transaction volumes increase, the limitations of manual templates become clear.
Tracking 50 or more open purchase orders across a shared spreadsheet is time-consuming and error-prone. Matching each PO against a goods receipt and a supplier invoice requires careful attention, and a missed discrepancy can result in overpayments or BAS errors that take time to unwind.
HashMicro's procurement software connects purchase orders, goods receipts, and supplier invoices in a single system. Approval thresholds are configurable, three-way matching runs automatically, and purchase orders can be generated directly from approved purchase requisitions. The result is a procurement process that is faster, more controlled, and easier to audit.
Hashy, HashMicro's AI Coworker, draws on connected procurement and financial data through the Company Nexus to help purchasing teams surface overdue approvals, flag budget variances against committed POs, and answer operational questions without pulling reports from multiple modules.
Conclusion
A structured purchase order process protects Australian businesses from overspending, disputed deliveries, and GST compliance gaps. Starting with a well-formatted template ensures every transaction is documented, GST is handled correctly, and your finance team has what it needs to process supplier invoices without delays.
Download the free purchase order templates above in Excel, PDF, or Word format and adapt them to your business needs. When manual processes start to slow your team down, HashMicro's procurement software gives you the tools to automate approvals, track open orders, and connect your entire procurement cycle in one place. Schedule a free consultation to find out how.
Frequently Asked Questions
A purchase order (PO) is a formal commercial document issued by a buyer to a supplier that authorises a specific purchase. It sets out the agreed items, quantities, prices, delivery expectations, and payment terms before goods or services are provided. A PO becomes legally binding once the supplier accepts it.
Yes. A purchase order becomes a legally binding contract once the supplier accepts it, either by confirming it in writing or by beginning to fulfil the order. The details on the PO, including quantities, prices, and delivery terms, must be accurate before the document is issued.
You should include GST on any purchase order raised against a GST-registered supplier. Show GST as a separate line item for each applicable product or service, and confirm the total amount inclusive of GST. For GST-free supplies, note the exemption clearly on the PO.
A purchase order is issued by the buyer before goods or services are delivered to authorise the transaction. An invoice is issued by the supplier after delivery to request payment. The purchase order sets the terms; the invoice confirms what was supplied and the amount owed.
You can create a purchase order using the free templates on this page, available in Excel, PDF, and Word formats. Download the template that suits your purchase type, fill in your business and supplier details, itemise the goods or services with quantities and prices, add the GST line, and have it approved by an authorised signatory before sending.
A purchase order does not automatically become a tax invoice. Under ATO rules, a tax invoice must be issued by the supplier and meet specific requirements, including the supplier's ABN, the words "Tax Invoice", the GST amount, and a description of the taxable supply. The supplier's invoice, not the buyer's PO, is the document used to claim GST input tax credits.
