LPO
Financial Dictionary — Procurement & Purchasing
Definition
L.P.O an acronym for Local Purchase Order
Detailed Explanation
LPO (Local Purchase Order) is an internal purchasing document issued to suppliers specifying quantities, prices, and terms for local procurement.
Common Uses
- Used in the purchase-to-pay cycle to validate invoices, approvals, and supporting documents.
- Used to strengthen internal controls over purchasing and supplier payments.
- Used to strengthen internal controls over purchasing and supplier payments.
Practical Example
- Example: Before payment, the AP team applies **LPO** to confirm the invoice matches the approved purchase documentation.
Why This Term Matters
- Why it matters: Prevents incorrect/duplicate payments, reduces fraud risk, and improves accuracy of payables and expenses.