What does "P.O." stand for?

Though it may have other meanings, "P.O." commonly stands for purchase order. A purchase order is a document prepared by a company looking to buy supplies or inventory. It is submitted to a vendor as an authorization to process the purchase, which involves charging the buyer and preparing goods.

Companies also use purchase orders to track buying activity and to manage budgets. Internally, a purchase order is normally signed by the responsible manager and then submitted to the finance department. Finance departments record and track purchase activity to monitor spending relative to budgets, and to ensure companies aren't overpaying based on contracts with vendors.