Which of the following is a key function of a Purchase Order (P.O.)?

A Purchase Order (P.O.) is a vital document in the procurement process that serves specific functions within inventory management. One of its key roles is to identify what merchandise is on order. This process begins when a business decides to restock or acquire goods; the P.O. details the items, quantities, and agreed prices with the supplier, making it essential for tracking what has been ordered.

By recording this information, the Purchase Order helps businesses maintain organized records and facilitates effective communication with suppliers. It ensures that both the buyer and the seller have a mutual understanding of what products are expected, which assists in inventory management and helps prevent discrepancies in deliveries.

While other functions like tracking sales to customers, managing employee schedules, or handling customer complaints are important aspects of running a business, they do not pertain to the primary purpose of a Purchase Order. In summary, option B accurately reflects the core function of a Purchase Order in inventory processes, focusing on managing incoming goods.