Deciding how to number purchase orders feels like a small decision and is one of the few that is genuinely hard to change later, because the numbers end up quoted on supplier records, delivery notes, invoices and years of accounting history. The rules that age well are unglamorous, and the schemes that cause trouble are the ones that seemed most helpful at the time.
Unique and never reused, absolutely
A reused number makes two transactions indistinguishable and breaks matching permanently for both. This is the one rule with no exceptions, and it is the rule manual schemes break, usually after a spreadsheet is restored from a backup or two people raise orders at once. Automatic issue from a single source is the only reliable guard.
Meaningless is better than meaningful
Encoding a department, a site or a year seems helpful and becomes a liability when the organisation reorganises, a site closes or a year ends mid-project. The meaning belongs in fields on the order, where it can be changed and reported on. The identifier should be a handle and nothing else, and dull identifiers age far better than clever ones.
Readable aloud and hard to mistype
Order numbers get read over the phone and typed into supplier systems. Avoid characters that look alike, keep the length modest, and consider a check digit if volumes are high. Every mistyped reference becomes an invoice that will not match, which is a manual investigation caused by a formatting decision.
Questions people ask about purchase order number
Should the number include the year?
It is common and it creates awkwardness at year end for orders spanning the boundary. If you want the year, put it in a field rather than in the identifier.
What about separate sequences per company or site?
A prefix per legal entity is usually fine, since entities are stable. Prefixes per department are the ones that cause trouble when the organisation changes shape.
What if a supplier quotes the wrong number?
Treat it as an exception with a reason rather than guessing. Correcting the reference on the record, with a note, is better than paying against an assumption.