IT Financials Glossary

Purchase Order (PO)

Posted in Purchasing by mgentle on August 26, 2010

Purchase order (PO): an official request to a vendor to provide goods or services at agreed conditions (price, quantity, delivery dates and payment terms).

It is important from an IT cost-management perspective to correctly determine whether the goods or services being purchased are to be assigned to a capex or an opex account, or a combination of the two. ERP systems can be automatically set up to do this for unambiguous things like physical goods (eg servers = capex). Unfortunately this is not always possible for services delivered by contractors, consulting companies or integrators, which can be capex or opex. In such cases then, this has to be manually done.


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