A purchase order is easy to describe as a document and more useful to understand as a running account. It starts as a statement of what you agreed to buy, becomes a commitment the moment the supplier acts on it, then accumulates receipts and invoices against its lines over days or weeks until the three quantities reconcile and it can be closed.
It becomes a commitment on issue
Once a supplier holds an order and acts on it, you are generally committed whatever your internal process says. This is why approval belongs before the order is sent rather than when the invoice arrives, and why organisations that approve afterwards have a review process rather than an approval one, whatever it is called internally.
It runs as three quantities
Ordered, received and invoiced, held per line. They diverge legitimately: part deliveries, over-shipments, several invoices against one line. Ordered minus received is what you are waiting for. Received minus invoiced is your accrual. Invoiced above received is exactly what the three-way match exists to catch before it is paid.
It closes deliberately
When received and invoiced reconcile with ordered, or when somebody decides the remainder will not arrive and records why. Orders that simply fade out of discussion accumulate, inflate commitments and eventually make the open-order report untrusted, at which point everybody goes back to asking each other and the system has lost its purpose.
Questions people ask about how does a purchase order work
Is a purchase order a contract?
It can form part of one, and how it interacts with a supplier's own terms depends on circumstances and jurisdiction. That is a question for your own legal advice.
Can it be changed?
Yes, as a dated revision rather than an overwrite, resent to the supplier, with re-approval above a threshold.
What if goods arrive without an order?
The invoice cannot be matched and needs approval on its own merits, which is the most expensive route through payables.
What happens if the supplier over-delivers?
Record what actually arrived, which will exceed the ordered quantity and should be flagged rather than silently accepted. Over-receipt is how organisations end up paying for more than they ordered without anybody deciding to.
Can an order be raised after the purchase?
It can be recorded afterwards, and it is documentation rather than a control at that point, because the commitment already exists. Counting how often this happens, by department, is more useful than accepting it silently.