Is a purchase order established on an initial record of receipt of the inventory?

A purchase order (PO) is a formal document issued by a buyer to a seller, indicating the items they intend to purchase, along with specifications such as quantity and price. It is not established on an initial record of receipt of inventory; rather, it precedes the receipt and serves as a contractual agreement. Once the goods are received, the receipt can be matched against the PO to ensure accuracy and completeness of the order.