Purchase Order vs Invoice: What Each Document Does
Companies that have an accounts team will talk about POs. If you have ever wondered about purchase order vs invoice, here is the short version: a purchase order is the client's permission to spend, and an invoice is your request to be paid. Mixing them up, or leaving the PO number off the invoice, is a common reason a perfectly good bill sits unpaid.
What a Purchase Order Is
A purchase order is issued by the buyer before or as the work is agreed. It states what they intend to buy, the price they approved and a PO number for their internal system. It is not a request for you to pay them. It is their record that the purchase was authorised.
What an Invoice Is
An invoice is issued by you after (or sometimes before) you deliver. It states what you provided and what they now owe. It has your invoice number, which is a different series from their PO number. For a refresher, see how to create an invoice.
| Purchase order | Invoice | |
|---|---|---|
| Who issues it | The client | You |
| Purpose | Authorises the purchase | Requests payment |
| Number | PO-… | INV-… |
| When | Before or at the start | When you bill |
How They Work Together
Ask for the PO before you start work if the client uses them. Put that PO number on the invoice, in the notes or a reference field. Their accounts team will match PO to invoice and release payment. If the amounts differ, they will query the invoice, so your lines should match the approved PO plus any written variations.
A PO is not a substitute for a contract, and it is not a receipt. For neighbouring documents, see invoice vs quotation vs proforma and invoice vs receipt.
Tip: If no PO arrives and the client still wants work, write an email that confirms the scope and price. Do not start a large job on a verbal "we will raise a PO later" unless you accept that risk.
The PO says they may buy. The invoice says they should pay.
Frequently Asked Questions
Can I invoice without a PO?
Yes, for many small clients. For larger organisations, they may refuse to pay without one.
Do I create the purchase order?
No. The buyer does. You create the invoice and quote their PO number on it.
What if the PO amount is lower than my invoice?
Stop and agree a change, or invoice only what the PO covers and bill the rest after a new PO.
Got the PO? Create the matching invoice and put that number in the notes.