A Purchase Order (PO) is a formal document created by a buyer to request goods or services from a seller. It outlines specific details such as the type, quantity, and agreed-upon price of the items. Once the seller accepts the PO, it serves as a legally binding contract between both parties. POs help businesses manage their purchasing processes efficiently by providing a clear record of what has been ordered. They also assist in budgeting and inventory management, ensuring that companies keep track of their expenses and stock levels effectively.