Purchase Order can be generated for the Service Order products on backed order.
In the navigation pane panel, go to Service then Service Orders
Create a service order with products on backed back order
From the Service Order ribbon which is located on the top panel. Click on button Purchase
You will be taken to the newly created purchase order screen
Expand title Show me 
Review and update the Purchase Order as needed e.g. increase QTY to be purchased purchased
Click on button Complete to process the purchase order order
Service Order shows the backed order back ordered part has been allocated and Percent Percentage Allocated is now 100% 100%
Fill in the Repaired Description
Click on button Complete to invoice the customer and complete the Service Order
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