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How to Create a Purchase Order

Raise, save and send a PO to a supplier.

6 min read Updated Jun 2026   How-To

Purpose

Create a Purchase Order from scratch — either manually picked items, or driven by MRP recommendations against re-order points. The PO is a commitment document: it does not move stock or money yet, but it does count against the supplier's open-order list and feeds the goods-receipt screen when stock actually arrives.

Before you begin

  • Supplier master record exists with current address and GSTIN.
  • Items in the PO exist in the item master with the right default tax structure and rate standard.
  • Delivery location decided (usually a warehouse, sometimes a counter direct).
  • Approval authority configured if your install requires the PO to be approved before sending.

Steps

  1. Start → Purchase & Sales → Purchase Orders → New PO.
  2. Pick the supplier. The system pulls the default payment terms and delivery address from their master record.
  3. Pick the delivery location (typically your warehouse).
  4. Add items in the grid — type the item code or use F4 to search by name.
  5. For each line, enter quantity and verify rate. Tax is computed from the item's tax structure; CGST + SGST split if the supplier is intra-state, IGST otherwise.
  6. Use MRP Suggestion (top-right) to auto-fill quantities based on re-order points if you prefer planning-driven POs — the suggestion respects current stock + open PO quantity.
  7. Set Expected Date at the header level — this drives the late-PO report.
  8. Click Save. The PO gets a number and status Open.
  9. Click Email PDF to send to the supplier, or Print for a hard copy. The supplier's response (acknowledge / reject / amend) can be logged back on the same PO.

What success looks like

  • A new PO number appears in the PO Register with status Open.
  • Quantity on order against the item increases — visible in Stock as on Date column "On Order".
  • The supplier appears in the Open Purchase Orders aging report.
  • Email mode: a PDF attachment lands in the supplier's inbox with the company letterhead.

Troubleshooting

"Item not active" error on a line.
The item is marked inactive in Item Master. Activate it (or pick a different item) before saving.
IGST vs CGST/SGST split is wrong on a line.
Check the supplier's state and your delivery location's state on the Header. The tax engine uses these two to decide IGST vs intra-state split.
MRP Suggestion grid is empty.
No items have re-order points configured. Set them in Item Master → Stock tab, or use MRP planning bulk import.
PO cannot be saved — "Approval required".
Your role has a per-PO approval limit. Either reduce the PO value or send it to the approver via the workflow panel.

Tips

  • Add a contract reference in the header notes if this PO is against an annual rate contract — it speeds up dispute resolution later.
  • POs raised by MRP carry an "MRP" badge in the list — useful for separating planning POs from ad-hoc ones.
  • Always email the PDF rather than copy-paste numbers into chat — the PDF is the legal commitment.
  • Warning. Editing a saved PO leaves an audit trail. If the change is material, cancel and re-issue rather than amending, so the supplier sees a new document.