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A purchase order (PO) is a document crucial in the purchasing process, involving two main parties: the buyer and the seller. The process begins with negotiations over terms, including the type, volume, price, and delivery date of goods and services. Once negotiations are complete, the buyer creates the PO and sends it to the seller. If the seller accepts the terms, they confirm the order, resulting in a legally binding contract between both parties. This video from Bullseye Money aims to help business owners understand the role and significance of purchase orders, along with quotes and invoices, in financial transactions.