Purchase Order vs Invoice: What's the Difference?
Purchase orders and invoices are both commercial documents but serve opposite roles in the buying process.
Purchase Order vs Invoice
| Purchase Order (PO) | Invoice |
|---|---|
| Created by buyer | Created by seller |
| Authorizes a purchase | Requests payment |
| Sent before goods/services | Sent after delivery |
| Sets agreed price and terms | Confirms amount due |
The B2B Payment Process
- Buyer issues PO with approved budget
- Seller delivers goods/services
- Seller sends invoice referencing PO number
- Buyer's AP performs three-way match: PO + receipt + invoice
- Payment processed
Always Reference the PO Number
Corporate clients require PO numbers on invoices. Missing PO = invoice rejected and payment delayed by weeks.
Ask clients: "Do you need a PO on this invoice? What's your AP process?"
Create PO-Ready Invoices
Add PO reference fields to invoices — include PO number prominently in header or notes.