Purchase Order

A purchase order (PO) is a buyer-initiated document that formally authorizes a purchase. It specifies exactly what the buyer wants — SKUs, quantities, agreed prices, delivery date, delivery address, and payment terms. In Indian FMCG distribution, POs flow in two directions: the distributor issues POs to the brand for primary stock replenishment, and large retailers or modern trade chains issue POs to the distributor for secondary sales.

The PO is the starting point of the order-to-cash cycle. Once a distributor raises a PO to the brand, it triggers stock allocation, dispatch planning, e-way bill generation, and eventually a tax invoice. Without a PO, there is no audit trail for why goods moved and who authorized the purchase — a compliance gap that becomes painful during GST audits or distributor disputes.

In a digital order management platform, POs are generated automatically when a distributor's stock falls below reorder level, or manually by the distributor through the portal. The system matches incoming GRN against the PO to verify that what was ordered matches what was received — closing the procurement loop cleanly.