While they might seem like just another task on your to-do list, the quality of your Purchase Orders (POs) can significantly impact your projects. When onboarding new customers, we’ve repeatedly seen trade contractors face delays, mismatched materials, and surprise charges—all because their POs weren’t clear or detailed enough.

A well-crafted PO does more than place an order—it ensures smooth communication, keeps your budget in check, and keeps your project on schedule. Done right, it also strengthens relationships with your vendors, making future projects even more efficient.

In this blog, we’ll discuss why you should always use a PO, the must-have details to include, and best practices for creating great POs faster and for less.

Why You Should Always Use a PO When Ordering Material

Anyone who has worked for a trade contractor knows that the speed at which a job can be completed depends on the team's communication skills. This is especially true when ordering materials.

That’s why a Purchase Order is more than just paperwork. It’s a critical tool for ensuring smooth operations, detailing what’s ordered, how much, and when and where it’s needed.

Here’s why you should always use a PO:

• Clear Communication: POs eliminate guesswork by specifying order details and reducing errors like wrong materials or quantities. While it may seem faster to call up a trusted supplier than to create a PO, having to return the wrong materials showing up at your job site and waiting for the correct order will take a heck of a lot longer. Not to mention, in some cases, you’re paying field workers to sit on their hands.
• Tracking and Accountability: They create a paper trail, making tracking orders and resolving discrepancies with deliveries or invoices easier.
• Budget Management: POs can help control costs by requiring formal approval – preventing overcharges and unexpected expenses.
• Vendor Efficiency: Suppliers rely on clear POs to fulfill orders accurately. The better your POs are, the faster they fulfill those requests. Vendors like working with trade contractors who make their operations more efficient. This can lead to stronger partnerships in which vendors might be more willing to offer discounts in the future. 
• Legal Protection: While not a contract, a PO is a legally binding document, reducing the risk of disputes with suppliers.

Using Purchase Orders is good business practice and essential for keeping operations organized, efficient, and cost-effective. By making them a standard part of your procurement process, you set your projects up for success from the start.

Must-haves To Include On Your Purchase Order

Trade contractors across various sizes, territories, and trades may require specific fields in their purchase orders. While needs vary, certain key details should always be included.

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Here are the essential elements every PO should include:

1. PO Number: A unique identifier for tracking the order.
2. Job Number: This is for your own records to keep your purchasing team more organized.
3. Order Date: The date the PO is issued to establish a timeline.
4. Vendor Information: Supplier name, address, and contact details.
5. Buyer Information: Your company’s name, address, and contact details.
6. Detailed Item Description: Quantities, unit prices, material specifications, and part numbers matching your vendor’s verbiage.
7. Delivery Details: Specify the delivery location, date, and any special instructions. Avoid writing “ASAP” for the delivery date when possible.
8. Payment Terms: Outline payment methods, deadlines, and conditions. Your PO needs to specify whether it is net 30, net 60, net 90, etc.
9. Total Cost: Include the entire order amount, including taxes or fees. If you have agreed upon discounts for specific items or all materials, that must be listed in your PO.
10. Authorized Signatures: If the total amount of the PO exceeds a threshold your purchasing team has determined, ensure an authorized representative signs the PO.

Including these elements guarantees clarity and helps avoid delays, disputes, and costly mistakes.

Additional Sections You Should Include In Your Purchase Order

You should include a few more sections in your purchase orders to keep both your purchasing team and vendors more organized. Those include the following:

• Cost Category: This is for your records as a purchasing manager so that you can more easily identify PO records when needed.
• Requisition Number: This is another section to help keep your purchasing team organized. During a job, the field can make many requests. By including a requisition number, you can limit the time spent on any given dispute between the field and the office.
• MPN, UPC, VPN: Including a Manufacturing Part Number, Universal Part Code, or Vendor Part Number can help your supplier find and deliver your materials more quickly. Include at least one of these numbers with each line item to maximize your vendor's efficiency.

With each of these fields included in your PO, your team and your vendor's team can quickly scan the document and find the information they’re looking for – creating a smoother procurement operation for all parties.‍

Best Practices For PO Creation 

‍Creating a great PO involves more than just including all the sections we mentioned above. There are other factors that your purchasing team should incorporate when creating a PO that will ultimately turn them from just another document into a tool for smoother operations.

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Here’s what separates a great PO from a mediocre one:

POs Should Be Proactive

Proper planning is the key to a great PO. You can leverage your buying power and plan materials procurement upfront by originating your PO from a Bill of Materials (BOM).

For example, a “Hold for Release” (HFR) PO allows you to order and lock in pricing for 1,000 feet of pipe upfront but gives your field team the flexibility to draw down on the order as needed. This avoids inventory management headaches, minimizes waste, and secures better pricing.

In contrast, a mediocre PO orders 1,000 feet at once, which can lead to storage costs incurred at your warehouse or potential damage during delivery. A bad PO orders materials in small increments—like 10 feet at a time—resulting in higher costs and inefficiencies.

POs Should Be Automated

Manual data entry is time-consuming and error-prone. Great POs use automation to handle repetitive tasks, like populating line items from field requests. This ensures accuracy, reduces administrative workload, and lets your purchasing team focus on more strategic tasks.

An important note is that achieving efficiency from automation will require digitizing your procurement process, including requests from field teams. While a picture of items written on a pizza box might seem like a time saver for a foreman, it's an all-too-common time waster for purchasing teams. Software like Kojo helps on both of these fronts. 

POs Should Come From a Centralized Purchasing Team

Centralizing your purchasing operations ensures consistency and accountability. When all POs come from a single team, tracking orders, avoiding miscommunication, and streamlining reconciliation for your accounts payable (AP) staff is easier.

OAs Should Be Attached to Your POs

Order Acknowledgments (OAs) are essential for aligning expectations between you and your suppliers. Attaching OAs to your POs ensures that both parties agree on pricing, quantities, and delivery timelines, reducing the risk of surprises when materials arrive on-site.

Line Item Detail Needs to Be as Descriptive as Possible

Over-simplified descriptions like “100 Raco 4SQ” are insufficient. A great PO includes detailed specifications, such as dimensions, material type, and part numbers. This clarity helps suppliers fulfill orders accurately and provides valuable data for analyzing purchasing habits and optimizing future procurement.

The Best POs Integrate With Your ERP And/or Accounting Systems

Integration with your enterprise resource planning (ERP) or accounting system eliminates the need for manual data re-entry. Automating data flow between systems allows your AP team to reconcile invoices faster, avoid errors, and stay on top of payments.

Kojo seamlessly integrates with trade contractors' preferred ERP and accounting systems. Any changes you make to POs within Kojo can be reflected in your other systems.

PO Approvals Need to Be Streamlined

Large purchases often require multiple layers of approval, especially for high-value projects. A streamlined approval process ensures that necessary stakeholders can quickly review and approve POs without becoming bottlenecks. Digital tools that provide PO visibility to all relevant parties can significantly enhance efficiency.

How To Create Best-In-Class Purchase Orders Efficiently

Crafting great purchase orders doesn’t have to be time-consuming or costly. Trade contractors can streamline their procurement processes by focusing on proactive planning and empowering their purchasing teams with the right tools.

With software like Kojo, creating accurate, automated, and effective POs becomes more straightforward and more cost-effective. Kojo centralizes purchasing, automates repetitive tasks, and integrates with your existing tech, so you can focus on bigger-picture issues such as how to improve your overall operations. 

Here’s how Kojo helps you create best-in-class POs:

• Automated PO Creation: Reduce the administrative workload by automatically populating POs from our new and improved sourcing grid. When the field makes a request, it automatically gets put into our sourcing grid, where you can compare vendors by material availability and price in a single dashboard. From there, you can select the vendor best suited to your current needs and automatically populate a PO with all the necessary information.
• Centralized Purchasing Management: Maintain consistency and accountability by consolidating purchasing through one system.
• Seamless Integration: Sync POs directly with your existing ERP or accounting software to eliminate manual data entry and errors. You can also edit POs in Kojo, which seamlessly connects to your ERP or accounting system. You can even see who made the changes to increase accountability.
• Streamlined Approvals: Simplify the approval process for large purchases with visibility and control for all stakeholders. You set the threshold for when a PO needs approvals and who needs to approve those purchase orders. You can even customize the notification those approvers get so they can’t miss it.

By digitizing your procurement process and using Kojo’s intuitive platform, you’ll reduce the cost of creating POs by 75%, improve vendor relationships, and keep your projects on track. The result? Fewer mistakes, less waste, and a procurement process that truly works for you.

For a custom tour of Kojo, including a live look at how POs can work for your purchasing team, book a demo today.