What is the primary purpose of a Purchase Order?

The primary purpose of a Purchase Order (PO) is to confirm the purchase of goods or services. A Purchase Order serves as a formal, written agreement between the buyer and the seller, detailing the items being purchased, their quantities, agreed prices, and any other relevant terms and conditions. This document not only provides a clear record of the transaction for both parties but also helps protect against misunderstandings and disputes.

When a buyer issues a Purchase Order, it communicates their intent to purchase certain goods or services and secures the commitment of the seller to fulfill that order. The PO becomes a binding agreement upon acceptance by the seller, ensuring that both parties are on the same page regarding what is being bought and sold.

The other options, while related to procurement processes, do not represent the primary purpose of a Purchase Order. For instance, requesting free samples is a preliminary step and not directly linked to formal purchasing, negotiating pricing typically occurs before a purchase order is issued, and analyzing supplier performance is an ongoing process that occurs after purchases have been made, rather than a function of the Purchase Order itself.