Do you know how to read POs sent by overseas purchasers? This article will teach you how to read them.

What is the process of PO purchase order?

The entire process of purchasing an overseas purchasers order is actually not complicated, and is mainly divided into the following steps:

1. The buyer creates a purchase order
   based on the purchase requirements, ensuring that all contents are complete and accurate.
2. Internal Approval
   Before being officially sent to the seller, the purchase order usually needs to go through an internal review process within the company to ensure that the terms meet the budget and needs.
3. Sending Orders
   The buyer sends the order to the seller by email or other means and waits for the seller’s confirmation.
4. The seller confirms (it is related to us from here on)
   that after receiving the PO, the order content needs to be carefully reviewed! For example, whether the quantity and specifications of the goods are correct, whether the delivery time is reasonable , etc.

Things to note in practice

From my own experience, the following two points are particularly worth noting:

The demand should be made clear

Don’t think it’s troublesome, the overseas purchasers product specifications, quantity, quality standards, etc. must be clearly stated. Remember one sentence: it is better to spend more time on communication in the early stage than to have disputes due to misunderstandings in the later stage.

Carefully read the contract terms

Focus on the following:
– How is liability for breach of contract determined
? – What are the 10 essential e-commerce business growth tools every online store should use acceptance criteria?
– How are payment terms agreed upon?
– Is there a confidentiality clause
? – How to resolve disputes?

The difference between PO purchase order and other documents

In foreign trade, in addition to PO purchase why marketing campaigns work and what steps to take to make them work orders, you may also overseas purchasers come into contact with many other documents, such as PI (Proforma Invoice), CI (Commercial Invoice), SO (Sales Order), etc. So what is the difference between PO and these documents?

1. PO vs PI (Proforma Invoice)

Simple comparison : PI is more like a “letter of intent” while PO is a “contract”.

• PO (Purchase Order) : A formal lithuania phone number order issued by the buyer to confirm the terms of the transaction and has legal effect.
• PI (Proforma Invoice) : A quotation confirmation document provided by the seller, used as a reference document after the buyer and seller reach a preliminary agreement.

2. PO and CI (commercial invoice)

Simple comparison : PO is “Requirements List” and CI is “Payment Receipt”.

• PO (Purchase Order) : More inclined towards order management, making it easier for buyers and sellers to connect.
• CI (Commercial Invoice) : Used for customs clearance, payment collection, etc.

3. PO and SO (Sales Order)

Simple comparison : PO is “buyer places order” and SO is “seller receives order”.

• PO (Purchase Order) : Initiated by the buyer, the content is mainly based on the buyer’s needs.
• SO (Sales Order) : Created by the overseas purchasers seller to confirm receipt of the PO and further detail the transaction content.

PO Risk Prevention in International Trade

In international trade, the main risk points of PO include:

– Risks in contract performance
– Risks in transaction entities
– Possible problems in document management
– ​​Risks related to letters of credit
– Hidden dangers in agency operations
– Risks brought about by payment methods

In this regard, the following preventive measures are recommended:

Although PO is not complicated, all steps in foreign trade must be taken seriously, even the simplest transaction documents. Whether it is understanding the difference between PO and PI, CI and other documents, or mastering the production and review process of PO, these skills will directly affect the effectiveness of your foreign trade business. For foreign trade people, doing every step well is the core of improving customer trust and order stability. I hope overseas purchasers these contents are helpful to you. If you want to know more details, welcome to continue to communicate. After all, in the field of foreign trade, sharing and exchanging experiences.