What is a purchase order (PO)? A guide for UK suppliers

For a business that sells to retailers, wholesalers or public bodies, the order is where the work starts. It decides what gets picked, what goes on the lorry and what the invoice can say. Every document that follows has to agree with it.

What is a purchase order?

The buyer's written instruction to supply. The Transalis EDI primer puts it in one line: "Purchase order: the retailer's request to buy specific products and quantities." Its counterpart from your side is the order acknowledgement, "the supplier's confirmation of what it will supply and when."

GS1, the standards body behind retail barcodes and EANCOM messages, defines the electronic version as "A message specifying details for goods or services ordered under conditions agreed between the seller and the buyer." It adds a rule of thumb for how orders should be cut: "The recommended business practice is that one Purchase Order is placed for one delivery in one location at one time."

From the receiving end, the order is a delivery commitment. Ocado Retail's Supplier Manual (v3.0, September 2023) says: "Purchase Orders (POs) are transmitted to suppliers using EDI or email via Olive. Suppliers are required to meet the delivery in full, on the due date and at the time specified on the order." Retailer and NHS rules on this page are quoted as published, checked in October 2026.

In EANCOM and EDIFACT the electronic order is the ORDERS message. In TRADACOMS it is the Order File. In X12 it is "transaction set 850 for purchase orders and 810 for invoices". For how the standards compare, see EDI transactions explained.

A purchase order at a glance, from the supplier's side

What does a purchase order contain?

The parties, the reference, the lines and the delivery instructions. The GLN guide describes the header: "In practice, a retailer's buying system sends a purchase order carrying its own GLN as the buyer and your GLN as the seller. GLNs also mark the ship-to, bill-to and deliver-to locations, so one order can point to three addresses without spelling any of them out."

Below the header sit the PO number, the order date and one line per product with its quantity. Read the product code with care. The GTIN guide warns: "The GTIN on an order line is the one for the unit being ordered, and that is often the outer case rather than the single pack." For a worked GS1 order taken apart segment by segment, read EDI mapping explained.

Not every order is a one-off. GS1's ORDERS message covers several patterns a supplier will meet:

What is a PO number, and why does every document quote it?

The customer's reference for the order. In GS1's ORDERS message it is the document number, defined as "Order Number assigned by document sender." You do not choose it, and an order change cannot alter it. Every later document quotes it so the customer can find the order it belongs to.

EANCOM gives each later message a slot for it, the qualifier "ON = Order number (buyer)". The paper delivery note carries it too:

The paperwork matters as much as the message. Ocado's list of what delivery documentation must contain includes the "Purchase order number", and warns: "A vehicle may not be tipped if the correct paperwork is not presented".

Some NHS trusts spell the rule out. East Midlands Ambulance Service NHS Trust (EMAS) says: "Delivery notes should be fixed to the outside of the goods delivered, displaying the purchase order number." And: "All invoices/credit notes must quote a valid EMAS purchase order number, failure to do so will result in the invoice being returned unprocessed and unpaid."

The requirement is your customer's. GOV.UK's general list of what an invoice must include does not mention it. For what a VAT invoice must carry, see EDI invoice explained.

What is an order response (order acknowledgement)?

Your answer to the order. Many customers call it an order acknowledgement; GS1 calls the message the purchase order response. GS1 lists four things it can say. The response may be:

• "an acknowledgement of receipt and understanding of data content of the Purchase Order"
• "a confirmation of acceptance of the Purchase Order"
• "a proposal of amendment to the Purchase Order"
• "a notification of non-acceptance for all or part of the Purchase Order"

Beyond a plain receipt, that means accept, accept with changes, or decline. A decline reads: "The supplier declines to supply the goods detailed in a Purchase Order or Purchase Order Change Request."

You do not have to answer in one go. "A buyer's Purchase Order may be responded to by one or more response messages, according to business practice." Whether you must respond at all, and how quickly, is your customer's rule. GS1 leaves it to the trading partners: "Agreement on exact procedures should be reached between trading partners and this agreement may be included in the interchange agreement."

The response earns its place when you cannot ship everything. The Transalis peak season EDI checklist says: "An order response tells the retailer whether you can fulfil an order. In peak, a quick, accurate response gives the buyer time to plan around any shortfall." Ocado asks the same of its suppliers: "Shortfalls or changes to the PO must be communicated to the Ocado Supply Chain Team at the earliest opportunity via EDI, Olive, or by contacting the Supply Chain Demand Planner directly."

Many trading relationships start without one. The retail requirements playbook explains: "The usual starting set is two documents: the purchase order the retailer sends you and the invoice you send back." Then: "Despatch advice (the ASN), order responses, credit notes and product data follow as the relationship grows."

How are purchase orders changed or cancelled?

By the customer, through an order change or a new order. GS1's order change message is "A message from the buyer to the seller, specifying details of the buyer's request to change a Purchase Order." It adds: "A buyer may request to change, or possibly cancel one or more goods items or services."

Some things cannot change. GS1 is firm: "A change may not be requested on the Purchase Order number, the identification of buyer and seller, or the line item number." Instead, "These changes may only be made by cancelling the previous Purchase Order and re-ordering." A new PO number means a new order.

The message function tells you what you are looking at. An order change can carry "1 = Cancellation" or a change to specific lines. It can also confirm your own proposal: GS1 says changes "can be buyer motivated or can be a confirmation of the seller's purchase order response." An order can also be sent again as a replacement or a duplicate. GS1 defines the replacement as "5 = Replace - To cancel and replace a previously sent message", so the earlier order is no longer the one to pick from. It defines the duplicate as "7 = Duplicate - A re-transmission involving the same parties, on the specific request of the receiver." It is the same order, transmitted again.

At some customers, a change agreed by phone does not count until the order is amended. EMAS states: "No changes to orders will be accepted unless specifically agreed by procurement and an amended copy of the purchase order issued." It also says "Urgent verbal orders will be confirmed by purchase order within 48 hours."

How are the ASN and invoice matched to the PO?

Against the order first, and at the dock before the invoice exists. The Transalis ASN guide sets out the sequence: "The retailer raises a purchase order, the supplier confirms it, then picks and packs the goods against that confirmed order." Then "Retailers match the ASN against the purchase order, and later the invoice, to check nothing has changed."

At Ocado's goods-in, the order is the yardstick. "It is vital at this stage that quantities match with purchase order details." Receipts are "automatically matched against expected volumes and date coding". Over-delivery is Ocado's call. Where goods arrive "in excess of the quantity stated on the order", the manual says Ocado may keep them; "Otherwise, Ocado reserves the right to request for the supplier to collect the goods at the supplier's risk and cost."

The invoice comes last. The Transalis EDI invoice guide says the retailer "checks it against records it already holds: what it ordered and what its warehouse received." The order and delivery references inside your invoice are what let it find those records. If your customer writes the invoice for you, see what is self-billing.

EDI purchase orders vs emailed PDF orders

An EDI order arrives as data. A PDF arrives as a picture of data. The Transalis EDI primer names the difference: "An emailed PDF still needs a person to open it, read it and key the figures into another system. That is where errors creep in and where a retailer's tight delivery windows get missed." This is the PDF trap.

A Scottish drinks company described it from the inside. Its larger customers ordered by EDI, while smaller outlets sent PDFs that staff had to rekey. Its Integrated Systems Manager said: "I found there were far more human errors where the customer was relying on sending us PDFs and email attachments". The team used to "print and match them to a form which showed the customer number and SKU, to then rekey this data into our own ERP system." Read the case study.

Ocado expects it: "All Ocado suppliers are expected to sign up to EDI, which is an industry standard and the most efficient way for a supplier to not only receive their order but also invoice Ocado." An EDI order needs no rekeying. If EDI itself is new to you, start with what is EDI.

Common purchase order problems for suppliers

The customer rules above point to seven mismatches worth checking for. The checks are our advice; the rules behind them are the customers' own.

1. PO number missing from the invoice or delivery note. EMAS returns such invoices unprocessed. Check every document carries the number before it leaves.
2. Acting on a change agreed by phone. EMAS accepts no change unless "specifically agreed by procurement" and the order amended. Where your customer works that way, wait for the amended order before you pick.
3. Picking a resent order twice. A duplicate is a re-transmission, and a replacement cancels the order it replaces. Check the PO number against the orders you already hold, as well as the message function, before treating a resend as new demand.
4. Short supply nobody was told about. Ocado wants shortfalls told at the earliest opportunity, and delivery discrepancies "before the time of delivery". Say so before delivery: in the order response where your customer takes one, otherwise by the route it names.
5. Delivered quantity differs from the order. Ocado's goods-in checks quantities against the PO. Ship what the order says, or what the customer has agreed after your response.
6. A PDF order rekeyed wrongly. Rekeying is where errors creep in. Check the keyed order against the PDF before you pick.
7. The wrong GLN during set-up. The Transalis GLN guide warns: "A mismatched GLN on a purchase order is one of the most common reasons a new EDI connection fails testing before it goes live."

Each one is a data problem before it is a delivery problem.

Receiving and answering orders through Transalis

Transalis is a managed outcomes provider for B2B integration, EDI and eInvoicing. The EDI page describes the flow: "When a customer sends a purchase order, it is received, validated, transformed into the required format, and delivered to the supplier."

There are two ways to work with it. Web EDI is "A secure portal where your team sees new orders the moment they land, acknowledges them in a click, and returns invoices and despatch notes, with no software to install." With integrated EDI, "Orders, invoices, dispatch notes, inventory updates and acknowledgements flow automatically between your systems, your 3PL partners and your trading partners". On the procurement processes side, Transalis can "Send and receive purchase orders automatically."

"Transalis DataTrack™ watches every message in real time; the managed team resolves issues before they affect trading." It lets you "Confirm that invoices and orders actually landed and matched." The network has 15,000+ connected organisations and carries £7bn+ in invoice value per year.

Start trading in days, or see the managed service on the EDI page.