Definition
Purchase order (PO)The document a buyer sends a supplier to order goods: items, quantities, agreed prices, delivery details and the buyer’s PO number. Once accepted, it is the buyer’s reference for checking the delivery and the invoice.
Definition
Sales order (SO)The record the seller creates in its own system after receiving an order. It restates the order in the seller’s codes, units and customer prices, drives picking, delivery and invoicing, and keeps the customer’s PO number as their reference.
What is the difference between a purchase order and a sales order?
| Aspect | Purchase order | Sales order |
|---|---|---|
| Created by | The buyer’s purchasing team | The seller’s sales desk |
| Item codes | The buyer’s part numbers and wording | The seller’s catalogue codes |
| Units and prices | As the buyer writes them | The seller’s units and customer price |
| Used for | Checking the delivery and the invoice | Picking, delivery and invoicing |
| Followed by | The seller’s order acknowledgement | The delivery note and invoice |
PO vs SO: which comes first?
In a buyer-led sale the PO comes first and the sales order is created from it. With a quote, the sequence is:
Enquiry or RFQ
The customer asks for prices; repeat buyers often skip this step. See RFQ vs RFP vs quotation.
Quote
The wholesaler replies with products, prices and terms; see quote automation for distributors.
Purchase order
The customer orders, often citing the quote number.
Sales order
The wholesaler enters it, matching each line to its catalogue.
Order acknowledgement
Items, prices and dates are confirmed to the customer.
Delivery and invoice
The buyer checks the invoice against its PO and the goods received.
When the sales order comes first
A customer rings the trade counter or emails a list with no PO number. The sales order is entered at once and a confirming PO follows; add its number, or the buyer’s accounts team may hold the invoice.
Purchase orders and sales orders in wholesale distribution
A wholesaler sits in the middle of the chain, so it deals with both documents every day. Customer POs become sales orders. Its own buyers raise POs to manufacturers, and each supplier’s order confirmation is checked against them. In a back-to-back order, a sales order line triggers the purchase order, and the customer’s PO number often travels with it.
The hard part is rarely the document. It is translation: the customer writes “90 bend 250 galv” and your catalogue knows SR-BU-250-90. According to our case study, a sales rep spends on average 4–7 minutes per line when creating quotes and orders by hand.
Example: one customer PO and the sales order made from it
A contractor orders ductwork from an HVAC wholesaler:
| Field | Contractor’s purchase order | Wholesaler’s sales order |
|---|---|---|
| Number | PO 7781 | SO 204518, customer reference PO 7781 |
| Line 1 | Spiral duct 250 x 3m galv, 12 lengths | SR-250-3000 Spiral duct Ø250 mm, galvanised, 3 m · 12 pcs |
| Line 2 | 90 bend 250 galv, 6 | SR-BU-250-90 Bend 90° Ø250 mm, galvanised · 6 pcs |
| Price | As quoted, ref. Q-3391 | Customer price from the wholesaler’s system |
Illustrative example: the companies, numbers and product codes are fictional.
Turning customer POs into sales orders automatically
ERP Agent does that translation. It reads the customer’s PO from email, PDF, Excel or Word and identifies the right products in your own catalogue, even when the customer writes its own part numbers. It then brings in customer pricing and prepares a sales order your team reviews before it lands in your ERP, CRM or other system. Each line carries a match score from 0 to 100; lines under 80 are marked.
Read more in purchase order to sales order automation and AI order entry for distributors. For the POs you send, see supplier order confirmations. To cost manual entry, try the quote and order cost calculator.
Related terms
- Order acknowledgement (order confirmation): the seller’s reply to a PO, confirming items, prices and dates.
- Blanket purchase order: a PO for an agreed quantity or period, called off in releases that each become a sales order.
- Three-way match: the buyer’s check of PO, goods received and invoice before paying.
- Quote to order and order entry: the processes around both documents.
