Purchase Order template

Free purchase order template in Docusign

Docusign provides a free, customizable purchase order template that businesses can use to generate a clear, legally sound po example template for transactions in Canada. Using Docusign ensures your orders are professional, complete, and signed by authorized personnel, which is critical for effective supply chain management.

• How to use the template: You can open the free template in your Docusign account or start a free Docusign trial to begin creating your purchase orders.

• Editing the template: The template is fully editable, allowing you to fill in all the details, from the itemized descriptions and pricing to the specific payment and shipping terms.

• Sending and storing the PO: Once you’ve completed the form, the sample purchase order template can be sent securely as a Docusign envelope to the seller for acceptance. The fully executed PO is securely stored in your Docusign account, and you can download or print a hard copy if needed.

Overview

The Purchase Order is the initial step in formalizing a transaction and acts as a contract once accepted by the vendor. It is not an invoice (which is a request for payment), but rather the buyer's documented authorization to purchase. In Canada, using a consistent purchase order template is a best practice for several reasons:

• Financial control: It provides a clear audit trail and helps control spending by ensuring that all purchases are pre-approved and documented with a unique PO number.

• Minimizing disputes: It clearly sets out the expectations on both sides regarding goods, pricing, delivery, and quality, which minimizes the potential for future disputes.

• Compliance: It ensures that details like the application of Canadian taxes (GST/HST and PST/QST) are considered upfront, assisting with accurate financial record-keeping.

Who it’s for

This purchase order template is an essential document for any Canadian organization or business that regularly purchases goods or services from outside vendors. This includes:

• Procurement and purchasing departments: To formalize and manage relationships with suppliers and to track expenditures.

• Small businesses: To provide a professional, organized, and clear sample purchase order template when dealing with suppliers, helping to streamline accounting processes.

• E-commerce and retail companies: To place detailed, itemized orders with manufacturers or distributors.

• Any business operating in Canada that requires an official document to authorize and commit funds before receiving an invoice.

Purpose of the agreement

The primary purpose of the Purchase Order is to serve as a legal offer from the buyer to the seller, detailing the terms of the sale. Once the seller accepts, it becomes a binding contract. Key purposes include:

1. Authorization and Control: It formally authorizes the purchase internally and creates a financial commitment that is tracked against a budget.

2. Clarity of Terms: It ensures that both the Buyer and Seller have a mutual understanding of the scope, price, quality, and delivery terms before work begins or goods are shipped.

3. Invoicing Reference: It mandates the use of the PO number on all subsequent invoices, which is critical for the Buyer's Accounts Payable department to match the purchase authorization with the final bill for payment.

Key clauses

The Docusign purchase order template includes the necessary clauses and fields to create a comprehensive and compliant commercial document in Canada:

• PO number and dates: A unique identifying Purchase Order (PO) Number and the date the order was issued.

• Buyer and seller information: Complete contact details for both the Buyer (the organization issuing the PO) and the Seller (the vendor).

• Itemized goods or services: A detailed table listing the item description, quantity, item price, and total price for each line item.

• Tax breakdown: Separate line items for the Subtotal, GST/HST, and PST/QST amounts, along with Shipping and Handling, to clearly calculate the Total Amount Due.

• Payment terms: Specifies the payment due date and the acceptable method of payment (e.g., EFT, Cheque).

• Shipping details: The "Ship to Address" and the Requested Delivery Date.

• Acceptance clause: States that the Seller accepts the order by signing and returning a copy, commencing performance, or delivering the goods, at which point it becomes a binding contract.

• Governing law: Specifies that the agreement will be governed by the laws of a chosen Canadian Province/Territory and the federal laws of Canada.

• Inspection and rejection: Reserves the Buyer's right to inspect goods upon delivery and reject any non-conforming, damaged, or defective items at the Vendor's expense.