B2B Sales Glossary:

Sales Execution & Deal Closing

Master the essential revenue and financial metrics that drive B2B SaaS success. From ARR and MRR to retention metrics and customer economics, these terms are critical for understanding pipeline health, forecasting growth, and making data-driven decisions.

Purchase Order

Short Definition

An official buyer document committing to purchase specific goods or services from a seller under agreed terms.

What Is a Purchase Order (PO)?

A purchase order (PO) is a formal, legally binding document issued by a buyer to a seller confirming an intent to purchase goods or services at an agreed-upon price, quantity, and delivery schedule. In B2B SaaS sales, the PO often serves as the final administrative step before contract execution or provisioning begins.

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In enterprise deals, the PO is typically issued after internal approvals and procurement reviews, ensuring budget, compliance, and vendor agreements are in order. For sellers, it validates the customer’s commitment and provides assurance that revenue can be recognized once the service or product is delivered as agreed.

Why POs Matter in B2B Sales

The PO process directly influences two key goals: Hitting Your Number and Closing Deals Faster. Without a clear PO process, deals can sit in procurement limbo for weeks despite verbal commitments from the buyer.

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Efficient PO management reduces friction between sales, legal, and finance teams and ensures invoices are processed promptly. When your team understands how to navigate procurement workflows, deal closure times shrink, and forecasting accuracy improves. In enterprise SaaS, POs often mark the difference between a “committed” deal in CRM and revenue that can genuinely be booked this quarter.

How to Use a PO in Your Sales Motion

1. Align Early with Procurement

During discovery or late-stage evaluation, identify who handles POs, what their approval thresholds are, and whether your company must be an approved vendor. This helps you anticipate lead times and avoid last-minute roadblocks.

2. Verify PO Requirements in the Contract Stage

Confirm if the PO is required before or after contract signing. Some enterprises require a PO number on invoices; others need it to authorize signing. Include any necessary PO language or numbers in your order forms to align with customer systems.

3. Coordinate with Finance and RevOps

Once the PO is issued, share it promptly with your finance or RevOps team to ensure alignment with the CRM record, billing schedule, and revenue recognition rules. Verify that PO amounts and subscription terms match the signed agreement.

4. Track PO Issuance in Forecast Calls

Include PO status as part of your deal inspection or forecast reviews. Deals waiting for POs can appear as late-stage risk items. Tracking this step systematically increases deal predictability and end-of-quarter conversion rates.

Key Metrics and Benchmarks

  • PO cycle time: Average number of days between contract signature and PO issuance. Best-in-class enterprise sales cycles target under 5 business days.
  • PO accuracy rate: Percentage of POs that match final contract terms. Aim for 98%+ to reduce rework and billing delay.
  • Revenue-at-risk due to missing POs: Dollar value of closed-won deals awaiting PO before invoice or activation.
  • Forecast coverage by PO status: Portion of your current-quarter forecast that has confirmed POs — a top indicator of deal solidity in late-stage funnels.

Common Mistakes and How to Fix Them

Mistake Fix Impact on revenue/forecast
Waiting until contract signature to ask about PO process Discuss procurement and PO steps during evaluation Reduces end-of-quarter closing delays
Misaligned PO and contract terms (e.g., dates, amounts) Validate details with buyer finance before submission Prevents billing disputes and delays revenue recognition
Failing to track PO status in CRM Add a “PO Received” field or stage in your process Improves forecast accuracy and deal visibility
Treating PO delays as buyer disinterest Escalate through champions and procurement contacts Saves deals from stalling in administrative cycles
Relying only on anecdotal data Combine quantitative CRM data with qualitative field feedback Supports more confident revenue projections

Frequently Asked Questions

How long does it usually take to get a PO?

It varies by company size and industry. Mid-market deals may get POs within 1–3 business days, while enterprise cycles can take 1–3 weeks due to multiple approvals.

Who is responsible for obtaining the PO?

The buyer’s procurement or finance department issues the PO, but the seller’s rep should stay close to the champion to monitor status and prevent bottlenecks.

Can a deal close without a PO?

Yes — in some organizations, a signed contract serves as the binding agreement. However, most large buyers require a PO for billing and payment processing.

What if a PO doesn’t match the contract?

Never invoice against an incorrect PO. Notify both the buyer and your finance team immediately to avoid accounting errors or compliance issues.

How can software automate PO tracking?

Revenue platforms and CRMs can integrate PO tracking fields, alerts, and workflows to automatically update deal stages when the PO is received or validated.

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