Complete Purchase Order Guide for Australian Retailers

Purchase orders (POs) are the backbone of predictable, organised buying for Aussie retailers. By formalising each request for goods or services, POs give you tighter budget control, clearer supplier communication and an audit trail that satisfies ATO record-keeping requirements. Whether you run a corner store in Brisbane or a multi-store operation in Melbourne, this guide demystifies purchase orders and shows you how to make them work for your business.

What Is a Purchase Order?

A purchase order is a vendor’s official instruction to a supplier, detailing the items, quantities, prices and delivery terms for future goods or services. In Australia, once a supplier accepts your PO, it becomes a legally binding contract. Unlike a casual email or phone order, a formal PO sets expectations, minimises misunderstandings and ensures both parties know exactly what’s on the table.

Why Retailers Need POs

• Better expense management and budget control — issuing a PO locks in prices and forces you to check funds before committing to spend.

• Stronger supplier relationships — clear instructions and agreed terms reduce errors and speed up delivery.

• ATO-compliant audit trails — having POs in place meets Australian Taxation Office requirements for record keeping, especially when you’re claiming GST credits.

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Essential PO Information

• A unique PO number for tracking and reconciliation

• Issue date and expected delivery date

• Supplier’s ABN, business name and contact details

• Your business name, address and purchase request contact

• Detailed description of goods/services (including SKUs or model numbers)

• Quantity, unit price, GST amount and total cost

• Payment terms (for example, “30 days from invoice date”)

• Delivery location and any special shipping or handling instructions

• Any additional terms and conditions, such as warranties or return policies

Standard PO Process Steps

1. Draft the PO: Use a standard template or your accounting/POS system to capture all required fields.

2. Internal approval: Route the draft through your purchase order approval workflow—this could involve a purchase manager or department head.

3. Issue to supplier: Send the approved PO via email or through an integrated platform.

4. Supplier confirmation: Supplier accepts or negotiates adjustments; if accepted, the PO becomes a binding contract.

5. Order fulfilment: Supplier packs and ships goods, quoting the PO number on the delivery docket.

6. Invoice matching: Supplier issues an invoice referencing the PO number; you match invoice to PO and goods received.

7. Payment: Release payment in line with your agreed terms.

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Creating POs in Xero & MYOB

Many Australian retailers rely on Xero or MYOB to automate PO creation and integration with their accounting records.

• Xero: Customise templates, automate numbering sequences and set up approval rules. You can raise POs from an expense claim or directly against an inventory item.

• MYOB: Enable GST-ready PO forms, set up supplier cards and link purchase orders to your inventory. You can also configure multi-level approvals for larger teams.

Both platforms feed purchase orders straight into your financial reports, cutting manual data entry and minimising errors.

PO vs Invoice

A purchase order originates with you, the buyer, to confirm what you intend to order. An invoice comes from the supplier, requesting payment for goods or services already delivered. Matching invoices to the corresponding PO number is best practice—this avoids duplicate payments, ensures you only pay for what was ordered and helps you manage cash flow.

Read more:What’s the Difference Between Purchase Order and Invoice?

Managing and Tracking POs

Managing and Tracking｜Use an integrated system

A modern retail POS or accounting package ties POs to inventory levels in real time, so you can see pending orders at a glance.

Managing and Tracking｜Set reminders and escalation rules

Automatically flag overdue supplier confirmations or late deliveries.

Managing and Tracking｜Regularly audit open POs

Reconcile unfulfilled orders, void obsolete requests and keep your budget projections accurate.

Investing in technology—such as a cloud-based POS that links directly to your accounting system—lets you streamline approval workflows, document changes and maintain one source of truth.

GST & ATO Compliance

GST & ATO Compliance｜Calculate GST correctly

On taxable supplies, show 10% GST per line item or note “GST inclusive” on your PO.

GST & ATO Compliance｜Display ABNs

Under A New Tax System (Goods and Services Tax) Act 1999, you must quote the supplier’s ABN to claim input tax credits.

GST & ATO Compliance｜Keep digital records

Store POs, delivery dockets and matching invoices for at least five years to meet ATO audit requirements.

Following ATO guidelines reduces the risk of disputed GST claims and ensures you’re always ready for a review.

Free PO Templates Australia

• Pre-formatted fields for GST, ABNs and terms

• Customisable header for your logo and contact details

• Simple design that works in Excel or Google Sheets

• Ready to print or email

Having a standardised form ensures consistency, reduces back-and-forth with suppliers and saves time on each new order.

By adopting clear, consistent purchase orders, Australian retailers can take control of their spending, strengthen supplier partnerships and simplify their ATO reporting. Whether you’re using Xero, MYOB or a cloud-based POS that integrates with your accounting software, the steps are the same: include all essential information, follow an internal approval process and match invoices to your POs. Start implementing these best practices today to keep your retail business running smoothly and compliantly.

Streamlining your purchasing process is crucial for any successful Australian retail business. From ensuring accurate inventory management to staying ATO compliant, Eats365’s cloud-based POS system can revolutionize your operations. With integrated functionalities like purchase order management, Eats365 empowers you to effortlessly create, track, and reconcile purchase orders, saving you valuable time and resources. Contact Eats365 today to learn more about how our solutions can drive efficiency and growth for your business.