Purchase order management from creation to receipt

If you sell on several channels and hold stock in more than one warehouse, every reorder has to account for what’s already on order for each SKU at each location. Stock on an open PO can’t be sold until it arrives. And someone has to chase it when it runs late.

That’s the norm for mid-market retailers. In the Linnworks 2026 State of Commerce Operations survey of 500 US and UK retailers, the average retailer sold on more than four channels, and only about a third rated their inventory visibility across channels and warehouses as excellent (33.2% in the UK and 37.2% in the US).

Purchase order management runs from the decision to reorder through to booking the stock in at your warehouse. 

Purchase order tracking is the part of that process between sending a PO and its stock arriving.

Deciding what to order and when

When you check a SKU against its reorder point, count what’s on hand plus what’s already on open POs. If you leave the open POs out, you’ll reorder units that are already on the way. 

For setting the reorder point and the buffer behind it, see the safety stock formula.

Running that check by hand for hundreds of SKUs across channels and warehouses takes too long. And mistakes leave you either short or overstocked. On a marketplace, running short costs more than the lost sale. An Amazon or eBay listing with no stock stops showing to buyers, and it can lose ground in search while it’s out of stock. 

Appalachian Offroad, a multichannel powersports retailer, lacked forecasting tools for its purchase orders and ended up with both overstock tying up capital and stockouts on popular items. Since moving to Linnworks, where the team now runs purchase orders and forecasting, the company reports stockouts on popular items are down by as much as 70%.

Linnworks stock forecasting uses sales velocity (how fast each SKU is selling) and supplier lead times (the days from raising a PO to receiving the stock) to set a reorder quantity and date for each SKU, then builds the PO. 

You set minimum and ideal stock levels per SKU or supplier at each warehouse, and stock forecasting can raise the PO automatically before you risk running out. 

For setting up automatic reorders, see how to set up automated purchase orders.

If you hold stock in more than one warehouse, decide which location each PO delivers to as part of the reorder. Send the stock to the warehouse that ships the channels it will sell on, so it doesn’t need moving again once it arrives.

If you sell through Amazon FBA, stock booked in from a PO may still need to go on an inbound shipment to Amazon before it can sell there. Add that transit time to the lead time for those SKUs.

Writing the purchase order

The delivery and the invoice both get checked against the PO. Be specific about:

• Supplier item codes: put the supplier’s code beside your SKU on each line. The supplier’s warehouse usually picks by its codes, and your team books stock in by your SKUs.
• Unit price: from the supplier’s current price list.
• Currency and shipping terms: for an overseas supplier, state the currency and who pays freight, duty, and insurance, using an Incoterm such as FOB or DDP. Those terms set your landed cost per unit, and they’re hard to settle afterward if the PO doesn’t state them.
• Expected delivery date: the date you’ll chase the supplier against if the stock doesn’t arrive.
• Specifications: anything the supplier could otherwise choose, such as size, color, or components on a made-to-order run.

Wrong item numbers, quantities, and product names are all common PO errors. The guide to purchase order quality control goes through how each one gets onto a PO and how to catch it before the PO is sent.

“We were losing money on incorrect purchase orders,” said Gary Forster, founder and managing director of UK Bathroomstore. Ordering the wrong stock brought the business restocking charges and holding costs it didn’t need to carry. Since moving to Linnworks, the company reports overstocked and aged SKU lines down by more than 35%.

Approving and sending the PO

If more than one person raises POs, have a second person approve any PO. Once a supplier accepts a PO, it can be a binding contract, so approval is the last point to fix a quantity or a price.

Ask the supplier to confirm quantities, prices, and the ship date in writing. Any change they make afterward should go on the PO too. 

How do you track a purchase order once it’s sent?

In Linnworks, a PO shows as Partial once some of its lines have been delivered and as Delivered once all of them have. Before any stock arrives, it sits at Pending or Open.

Statuses matter because your reorder calculation counts stock on open POs. If stock is booked in without being recorded against its PO, the PO stays Open, and the calculation counts those units twice, once on the shelf and once on order. The next reorder then comes up short.

Chase any PO that passes its expected date.

When the stock does arrive, measure the supplier’s lead time from the date the PO was raised to the date the stock was booked in, and use that figure in your reorder point instead of the one the supplier quoted.

Lead times also change through the year. Suppliers and freight slow down in the run-up to Q4, and many factories in China close for several weeks around Lunar New Year, which falls in early February 2027. Build that extra time into POs for peak and early-year stock. For how other retailers are preparing for peak, see the Inside Peak benchmark report.

Receiving stock against the purchase order

Count each delivery against the PO line by line. The packing slip only tells you what the supplier thinks it sent. How purchase orders, packing slips, and invoices differ sets out what each document is for.

Check condition and specs before anything goes to a pick location, because damaged or wrong stock on a shelf can end up in a customer’s order.

When a delivery comes in short, ask the supplier whether the missing units are still coming. Leave them on the PO and push the expected date back if they are. If the supplier can’t send them, you can set the part-delivered (Partial) PO to Delivered without booking any more stock. In both cases, let accounts know about the shortfall before the invoice gets paid.

Over-deliveries go the other way. By default, Linnworks Mobile (the app used to scan stock in at receiving) lets receivers book in more than the PO quantity. All of it goes into stock, and the audit trail records the PO quantity and the extra separately. That default keeps receivers moving when a delivery doesn’t match the PO, and it lets a supplier’s over-delivery become your stock without anyone deciding to accept it. If you send over-deliveries back or refuse to pay for them, turn overbooking off in the app’s settings so receivers can’t book past the PO quantity.

Your receipts also give you each supplier’s fill rate (units received divided by units ordered). If a supplier’s fill rate keeps dropping, raise it with them before their short deliveries cause a stockout.

Keeping purchase orders and stock in one system

In Linnworks, stock booked in against a PO goes straight into the stock levels your sales channels sell from. Book a demo before your next reorder run to see a PO go from reorder to booked-in stock.

FAQs

What’s the difference between a purchase requisition and a purchase order?

A purchase requisition is an internal request to buy, sent to whoever approves spending. A purchase order is the document sent to the supplier once the purchase is approved. In a small purchasing team, an approval step on the PO itself does the same job with one fewer document.

Do I need separate purchase order software if I have an inventory management system?

Not if your inventory system handles purchase orders. Check that it can create POs, book deliveries in against them, and count open PO quantities when it works out reorders.

How do open purchase orders affect stock levels on my sales channels?

Stock on an open PO shows as due in Linnworks rather than available, so your channels don’t list it before it arrives. Once receivers book it in against the PO, Linnworks updates the available stock level and syncs it to every channel you sell on.