Components of an Order Letter

An order letter is an official document containing details of the products purchased by an individual or an organization. It is also known as a purchase order letter (PO). It is an agreement between the buyer and the seller of goods. It mentions all the instructions that enable both the parties to fulfill their obligations. It is extensively used in export-import trade and inter-state dealings. They are mainly used for bulk purchases. The main elements of a purchase order are:

• Date of purchase
• Place of purchase
• Name and address of the seller
• Name and address of the buyer
• Product description – i.e. the total number of items, the number of cartons and the items in each carton, product type (perishable or durable), etc.
• Purchase price – It is the rate at which the items are purchased
• Freight charges
• The date of dispatch of goods – It is not necessary that the day of purchase and the date of dispatch should be the same
• The place of delivery of goods
• The insurance policy if goods are lost in transit, etc.
• Mode of payment


PO letters are legal binding on both the parties. Hence, utmost care and serious effort should be made while drafting them. Many templates are easily available to help you write a complete order letter. They also provide you with appropriate words and useful headings. If you are not confident of drafting it properly, then you can hire a professional for the same. Remember, any loophole may result in a huge financial loss. It will also strain your business relations and you may have to take the trouble of taking a legal recourse.

Given here are some practical guidelines for drafting an order letter. You can follow them while drafting one by yourself

• It should be exact and definite. Nothing should be left to chance. All details, such the manner of payment, should be clearly mentioned
• Keep the language simple. Avoid ambiguous and confusing statements
• Product description should be complete. It helps to fix accountability in the event of loss or theft.
• The dates of dispatch and delivery should be accurately mentioned
• It should be written on a company letterhead.
• Both the parties should duly sign the document.
• Rework the order letter a number of items to eliminate all loopholes
• Ensure that the letter is complete but not complicated

Know more about Order Letters.