01
What does a purchase order do?
The PO gives the parties a common reference for what the buyer authorised. Internally, it may evidence budget or purchasing approval; externally, it communicates the requested items and conditions to the seller.
Its legal effect depends on the contract, acceptance and jurisdiction. A document template cannot decide whether a binding agreement exists for a particular transaction.
- Authorised buyer and supplier
- Requested goods or services
- Quantity and agreed price
- Delivery location and timing
- Commercial terms and references
Use the field structure in the purchase order format.
02
What information belongs on a PO?
Include a unique PO number and date, buyer and supplier identities, delivery and billing addresses, line descriptions, quantities, rates, currency, expected taxes or charges, delivery date, payment terms and authorised contact.
Specific industries or jurisdictions may require more. Keep attachments, scope statements and approval evidence linked when the line description alone cannot explain the purchase.
- PO identifier and date
- Buyer and supplier
- Lines, quantities and prices
- Delivery and payment terms
- Approver and supporting scope
See the seller’s proposal in a quotation template.
03
What is a PO number?
A PO number, or purchase order number, is the unique reference the buyer gives each purchase order. It lets both sides refer to the same order in confirmations, delivery notes and invoices.
Many buyers need the PO number on the invoice before they will route it for payment. In Invoicera, the customer's PO number can be added to the outgoing invoice, and customers can view, download and pay that invoice in the client portal.
- Issued by the buyer, one per order.
- Quoted on the seller's invoice.
- Helps the buyer's accounts payable team route the invoice.
- Does not prove delivery or payment.
Customers can view, download and pay invoices that quote their PO number in the client portal.
04
Purchase order versus quote and invoice
A seller’s quote proposes commercial terms. A buyer’s purchase order communicates an authorised order. A seller’s invoice requests payment for the supplied goods or services. The sequence can vary, but the issuer and purpose remain important.
Referencing the PO on the invoice helps the customer route and verify the bill. It does not mean the invoice automatically matches the authorised quantity or completed delivery.
- Quote: seller proposes.
- Purchase order: buyer orders or authorises.
- Invoice: seller bills.
- Payment record: evidence of money movement.
Compare the seller’s payment request in what is an invoice.
05
Purchase order vs invoice: the key differences
Purchase order vs invoice comes down to who issues the document and what it asks for. The buyer issues the purchase order to order or authorise goods or services. The seller issues the invoice to request payment once they are supplied. The same distinction answers invoice vs purchase order and PO vs invoice: one document orders, the other bills.
The two usually refer to each other. The invoice quotes the PO number, and the buyer compares the invoice with the purchase order before paying.
| Point | Purchase order | Invoice |
|---|---|---|
| Issued by | The buyer | The seller |
| Purpose | Orders or authorises goods or services | Requests payment for goods or services supplied |
| Timing | Before supply | At or after supply, under the agreed terms |
| Creates an amount owed | No | Yes, once issued on credit |
| Reference number | The buyer's PO number | The seller's invoice number, often quoting the PO number |
Keep outgoing approval distinct through invoice approval workflow.
06
What is PO matching?
Matching compares the incoming supplier bill against the purchase order and, where relevant, receiving evidence. That is an accounts-payable control owned by the buyer. It is separate from approving outgoing customer invoices.
Invoicera can carry a customer-provided PO reference on an outgoing invoice, but it should not be described as capturing vendor bills, matching purchases or running supplier-bill approval.
- PO: what the buyer authorised.
- Receipt: what arrived or was accepted.
- Supplier bill: what the seller charged.
- Mismatch: requires the buyer’s AP investigation.
Track customer PO references through invoice management.
07
Worked example: invoice against an authorised PO
A buyer issues a PO for 100 units at $40, an authorised value of $4,000. The seller delivers and invoices 90 units at the agreed rate, for $3,600 before any applicable tax.
The seller references the PO on its outgoing invoice. The buyer’s AP team determines whether delivery and invoice match its records. The remaining 10 units are not automatically billable merely because the PO authorised up to 100.
- PO: 100 × $40 = $4,000
- Delivered and invoiced: 90 × $40 = $3,600
- Unbilled quantity: 10 units
- Buyer verifies the incoming bill under its AP process.
Find related document terms in the Glossary.
