The formal document a buyer issues to a supplier authorizing pallet purchase at agreed terms.
Detailed Definition
A purchase order (PO) is the buyer's formal, numbered commitment to buy specific goods at stated prices and terms. A pallet PO normally identifies the pallet by specification or part number, the quantity, unit price, delivery address and date or schedule, payment terms and any requirements such as ISPM-15 marking or inspection on receipt. Once the supplier accepts it, the PO usually forms part of the contract, and its number is used to match the delivery and the invoice. It often follows a pallet RFQ.
What a pallet PO should spell out
- The pallet specification or drawing reference, including revision level.
- Grade definitions for recycled pallets, not just a grade name.
- Quantity, delivery dates and ship-to address for each site.
- Unit price, freight terms and any surcharges.
- Treatment and marking requirements, such as heat treatment for export.
- Inspection, rejection and replacement terms.
- Payment terms and invoicing instructions.
Blanket POs and release schedules
High-volume pallet users often issue a blanket PO covering a set period and quantity at agreed prices, then call off deliveries with releases as needed. This cuts paperwork while keeping terms fixed. Many trading partners exchange POs electronically through EDI, where the purchase order is transaction set 850, and suppliers may send an ASN before each delivery.
Matching the PO, receipt and invoice
Accounts payable commonly uses a three-way match: the PO, the receiving record and the supplier invoice must agree on quantity and price before payment. Counting and inspecting pallets at the dock is what makes that match reliable. Record shortages, damaged pallets and wrong specifications on the receiving document, and tell the supplier promptly so credits or replacements can be issued against the same PO.
Related Glossary Terms
Frequently Asked Questions
What is the difference between a quote and a purchase order?
A quote comes from the supplier and states what it is willing to supply and at what price, usually for a limited time. A purchase order comes from the buyer and commits to buying on stated terms. In many cases a contract is formed when the supplier accepts the PO. If the PO terms differ from the quote, such as price, quantity or delivery date, resolve the difference before production starts.
Should a pallet PO reference the specification or just the size?
Reference the full specification. A PO that says only 48x40 pallet leaves room for very different pallets: different board counts, thicknesses, species, entry types and grades. Point to a drawing or written spec with a revision number, and define recycled grades in writing. That gives both sides a clear basis for inspection and rejection, and avoids disputes when a delivery does not perform as expected.