If sales are how money comes in, purchasing is how you make sure you have something to sell. Yet many businesses treat buying as an afterthought — a WhatsApp message to a supplier, a payment, and a box that shows up later. That informality is exactly where stock errors and cash surprises come from.

A purchase order (PO) fixes this. It turns a casual "can you send me 50 units?" into a clear, trackable document — and its partner, goods receipt, is the moment that order becomes real, counted stock.

What a purchase order actually is

A purchase order is a formal request to a supplier to provide specific goods at agreed quantities and prices. It protects both sides: the supplier knows exactly what to send, and you have a record of what was promised, at what cost, and when it's due.

The purchase order lifecycle

Every PO moves through the same four stages — and understanding them is most of the battle:

The purchase order lifecycle: Draft, Ordered, Received, and In stock, where the final stage adds items to inventory
Draft → Ordered → Received → In stock. Only the final step touches your inventory.
  • Draft — you plan the order: which products, how many, at what cost.
  • Ordered — the PO is confirmed and sent to the supplier.
  • Received — the goods arrive and you check them against the order.
  • In stock — receiving the goods adds them to your inventory, automatically.

Why goods receipt matters

The single most important rule: stock should only increase when goods are actually received — not when the order is placed. Ordering isn't having. If your system adds stock the moment you raise a PO, your shelves and your screen will disagree the instant a delivery is late or short.

Good goods receipt also means checking what arrived against what you ordered. Received 48 of 50? Record 48. That short delivery is now visible, not a mystery you discover during a stock-take three months later.

Close the loop with cash

A PO also anchors what you owe. When you receive goods, you know exactly what's payable and to whom — so your payables are as accurate as your stock. No more reconciling a pile of supplier bills against fuzzy memories of what actually turned up.

In Lekhio, a purchase order flows from draft to received in a couple of clicks, and receiving stock updates inventory automatically — so what's on the shelf, what you ordered, and what you owe always tell the same story.