Canceling a customer’s purchase order isn’t really the best-case scenario, but sometimes you just have to do it. You may have to cancel a PO due to your organization’s inability to complete it on time, not having the required goods, or a suspicion you have about the customer and their PO. Whatever the reason, you need to let the customer know by sending them a PO cancelation letter.
What Should a PO Cancelation Letter Look Like?
Whatever the reason for the cancelation, a PO cancelation letter is not something you should use to “give the customer what for”. Be polite. Apologize for the inconvenience. Even if you don’t consider the cancelation to be your fault. Clearly state the reason (or reasons) why you can’t fulfill the purchase order.
Don’t forget to list the items on the order you are canceling. Make sure to also remind the customer about any action they need to do and provide a contact to reach you on with questions.
A PO cancelation letter should contain:
- Customer’s company information (name, address…)
- Name of the person taking purchase orders
- Your company’s information
- Name of the person in your company canceling the order (if you are canceling the PO, it’s your name)
- Order number for the items you are canceling
- Order placement date
- What items are you canceling
- What items you are not canceling (if for instance, you are able to only partially complete the order)
- Description of the items you are canceling (quantity, size, inventory number, etc)
- When the cancelation will take effect
- Why you are canceling the order
- A request for confirmation of the cancelation by the customer (usually in writing, but email is often acceptable)
- Contact information that the customer can reach you on with any questions (email, phone number)
- Copies of purchase orders, invoices and receipts used for the order.
That’s a lot to consider, so to make it clearer, here is an example of how a PO cancelation letter should look like.
PO Cancelation Letter Example
Name of your company
City, State, Zip Code
Company representative canceling the order
DATE OF PURCHASE ORDER CANCELATION
Name of customer’s company
Customer’s company address
City, State, Zip Code
Person responsible for taking orders
“Dear (insert name of the person responsible for taking purchase orders within the customer’s company):
I am writing to inform you that my company will have to cancel the purchase order NUMBER you placed on DATE for AMOUNT.
Unfortunately, due to time constraints, we are unable to complete your purchase order by the required date.
I apologize for any inconvenience. We are offering a REFUND within 7 working days, as per our agreement.
If you have any questions, please reach me at Name@email.com or phone number 000-123-4567.
Thank you for your understanding.
Your full name and signature
List of included documents (receipts, invoices, POs…)
Canceling a PO is not the end of the world. Sometimes, you just have to do it. If that’s the case, we hope this article can help you let your customer know.
Need help with creating, approving or sending purchase orders? Try Purchase Order Plus for free.
Do you have any questions about PO cancelation letters and how to write them? Let us know in the comments below.