Purchase order
template for Excel

The Excel version of the purchase order template works as a calculator as well as a form. Type a quantity and a price and the line total, subtotal, VAT and total update on their own. This page explains how the formulas work, how to keep them safe, how to organise a year's worth of documents, and what a UK purchase order must show.

How the formulas work

Each line's amount is its quantity multiplied by its unit price, rounded to the penny: =ROUND(B12*D12,2). The subtotal adds up the amount column with SUM, the VAT line multiplies the subtotal by the VAT rate cell, and the total adds them together. Type only into the description, quantity, unit and price cells; the amount and total cells should be left alone. The empty rows below the example lines already contain the formula, and the money format shows nothing until you enter a quantity and price, so the sheet stays tidy.

Adding rows without breaking the totals

If you need more lines than the template provides, insert new rows in the middle of the lines (right-click a row number, Insert) rather than below the last one. Excel then extends the SUM range automatically. Copy the amount formula into the new row by dragging down from the row above. A quick way to check nothing is broken is to click the total cell and look at the formula bar: it should refer to the subtotal and VAT cells, not to a typed number.

Protecting the formulas

To stop a formula being typed over, lock the calculated cells. Select the cells you type into, choose Format Cells, Protection, and untick Locked; then choose Review, Protect Sheet. From then on only the input cells can be edited. Keep one workbook per year, and make a new sheet for each purchase order by right-clicking the sheet tab and choosing Move or Copy, Create a copy, naming each tab with its number.

Sending it

Send a PDF, not the spreadsheet. In Excel, choose File, Export, Create PDF/XPS (or Save As, PDF on a Mac), and select only the purchase order sheet. Check the print preview first: the template is set to fit one page wide, so it prints and exports cleanly on A4. Keep the workbook as your working record and the PDF as the copy you sent.

Changing the VAT rate

The VAT rate sits in its own cell next to the VAT line, formatted as a percentage, and the VAT and total formulas refer to it. If you are not VAT registered, delete the VAT row entirely (right-click the row number, Delete) and check the total now equals the subtotal: an unregistered business must not show VAT. If you charge 5% on some work, change the rate cell to 5%, or keep two purchase orders rather than mixing rates on one sheet, which is simpler to get right.

What the purchase order must show

Raise a purchase order whenever you commit to spending money with a supplier, especially for larger orders, regular stock, or services where the price and delivery date matter. A purchase order gives you a record of what you agreed before the invoice arrives, so you can check the invoice against it, and it shows what you have committed to spend before the bills land.

The template's example lines, which you replace with your own:

Filling in the purchase order

1. Add your business details and the supplier's name and address.
2. Give the order the next PO number and today's date.
3. List each item or service with the quantity and the price you agreed.
4. Add the delivery address, the date you need it by and a contact on site.
5. State your payment terms and ask the supplier to quote the PO number on their invoice.
6. Have it approved by whoever authorises spending, then send it as a PDF.

Purchase orders, contracts and VAT

Once a supplier accepts a purchase order, by confirming it or by delivering, it is usually a binding contract on the terms it sets out, so be precise about quantities, prices and dates, and attach or reference any specification the goods must meet. If the supplier accepts on its own terms and conditions instead, the terms that apply can be disputed; the simplest protection is a short line on the purchase order saying your terms apply, or agreeing the terms in writing up front. A purchase order is not a tax document and carries no VAT of its own: the supplier's invoice is what records the supply and any VAT, and it is the invoice, not the purchase order, that a VAT-registered buyer needs to reclaim VAT. Showing expected VAT on the purchase order simply helps you check the invoice when it arrives.

Purchase order or invoice?

A purchase order comes from the buyer before the supply; an invoice comes from the supplier after it. Matching the two, and the delivery note that records what actually arrived, is how businesses make sure they only pay for what they ordered and received. Suppliers who receive a purchase order should quote its number on their invoice.

Three-way matching for small businesses

Before paying a supplier invoice, check three things agree: the purchase order (what you ordered and the price), the delivery note (what arrived) and the invoice (what you are being charged). Any difference, such as a short delivery or a price increase, is queried before payment. It sounds like big-company process, but it takes seconds with a numbered purchase order, and it stops overpayments and duplicate invoices getting through.

When a customer sends you a purchase order

If you are the supplier, a purchase order is good news: it confirms the order and tells you exactly what the customer's accounts team will pay against. Check it matches your quote before you accept it, and query any difference straight away. Then quote the PO number on your invoice, deliver exactly what it lists, and invoice for exactly that. Many large customers pay only when the invoice, the purchase order and the goods received record agree, so a mismatched invoice can wait weeks.

Blanket and standing orders

For regular supplies, such as monthly stationery or a cleaning contract, a single blanket purchase order can cover a period and a maximum value, with deliveries called off against it. Each invoice then quotes the same PO number and the running total is tracked against the limit. It saves raising a new order each time while keeping spending under control, and it gives your supplier certainty about the relationship.

Purchase orders and cash flow

Every purchase order is money you have promised to pay, so an open-orders list is an early view of your outgoings. Add up the purchase orders not yet invoiced, and the invoices not yet paid, and you know what is coming out of the bank in the weeks ahead. For a sole trader or small business, that simple list is often the difference between being surprised by a big supplier bill and being ready for it. When an order is cancelled or reduced, update or cancel the purchase order in writing too, so your list and the supplier's stay in step.

Common mistakes

• Ordering without a number. Without a PO number, supplier invoices are hard to match and easy to pay twice.
• Vague descriptions or prices. A purchase order is a contract once accepted; be exact about what you are buying and the price.
• Paying an invoice that does not match the order. Check quantity and price against the purchase order before paying.
• Typing over a formula. A typed number in a total cell stops updating; restore the formula or protect the sheet.
• Adding rows below the SUM range. Insert rows inside the lines, so the subtotal includes them.

Checklist before you send it

Before a purchase order goes out, check it against the list of what it must show:

• A unique purchase order number is on it and correct.
• Your business name, address and contact is on it and correct.
• The supplier's name and address is on it and correct.
• A description of each item or service, quantity and agreed price is on it and correct.
• Delivery address and required date is on it and correct.
• Payment terms and any other conditions is on it and correct.
• Authorised by, and the order date is on it and correct.
• A copy is saved with your records.

Keep a copy

Keep a copy of every purchase order you issue or receive, digital is fine, with the payments that relate to it. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send HMRC quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028. The MTD requirement checker shows when it applies to you, and how long to keep invoices covers retention.

Other formats and the full guide

This page covers Excel. The purchase order template guide explains the document itself in full, and the same template is available in the other formats from there.

A TapTax account, free to start, creates and sends invoices, tracks which are paid, keeps receipts and bills with your records, and files your quarterly updates to HMRC from the same data.