It can also specify payment choices for the seller, like electronic payments ( EFTs), among others like higher fraud-risk paper checks.įor reference, an invoice contains the original purchase order number. An invoice contains the previously agreed-upon amount, which the buyer must now pay once the order is fulfilled. When the purchase order terms are met, the seller issues an invoice. The purchase order is a legally binding contract after it has been approved. Then, the purchase order is sent to the supplier for approval. This document records the client’s expectations for the products or services needed, as well as the quantity, pricing, and terms.

What is a Purchase Order?Īt the beginning of a business transaction, the buyer issues a purchase order (PO). It’s important to know the differences between these two documents in your procurement and AP recording and payments processes and how they’re matched to avoid wasted organizational spend.Ī purchase order is sent by the buyer to the vendor in order to track and manage the purchasing process, whereas an invoice is sent by the vendor to the buyer as an official request for the goods or services that the vendor has provided.Īlthough a purchase order and an invoice contain much of the same information, they provide two distinct purposes. Purchase orders from the buyer’s procurement department and invoices from the vendor’s billing department have similarities and differences. It’s easy to be unsure of the differences between a purchase order and an invoice, especially if you’re a new business owner.

Managing Your Company’s Purchase Orders and Invoices.

Can you invoice without a purchase order?.

Importance of Both Purchase Order and Invoice.

Purchase Order vs Invoice: Similarities.

Po number invoice