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A purchase order (PO) is a key document in the purchasing process, typically involving a buyer and a seller. The process begins with negotiations on terms like the type, volume, and price of goods, as well as delivery dates. After negotiations, the buyer creates a purchase order and sends it to the seller. If the seller agrees to the terms, they respond with a purchase order confirmation. This exchange establishes a legally binding contract between the two parties, solidifying the agreement and outlining the specifics of the transaction.