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A purchase order is a crucial document in the purchasing process, involving two main parties: the buyer and the seller. The process begins with negotiations on key terms such as the type, volume, and price of goods or services, as well as the delivery date. Once negotiations conclude, the buyer generates a purchase order and sends it to the seller. If the seller agrees to the terms, they reply with a purchase order confirmation, thereby creating a legally binding contract between the two parties. This overview highlights the role and importance of purchase orders within business transactions.