Guide
Purchase Order vs Invoice
A purchase order and an invoice are two ends of the same transaction. Getting them right gives both sides a clean record and far fewer payment disputes.
Who issues each one
The buyer issues a purchase order (PO) to the supplier. It says: here is exactly what I want to order, at this price. The supplier issues an invoice back to the buyer once the goods or services are supplied. It says: here is what you now owe.
How they connect
The PO comes first and sets the terms. When the supplier invoices, they quote the PO number on the invoice so the buyer can match the bill to the order they approved. That single reference number is what keeps accounts payable clean and stops unauthorised charges slipping through.
The usual order of documents
For a typical order: the buyer sends a purchase order, the supplier delivers with a delivery note, then the supplier sends an invoice quoting the PO number, and finally a receipt once it is paid. Each document references the last, so everyone agrees on what was ordered, delivered and paid.
Matching the order, delivery and invoice
In a tidy process three documents should agree: the purchase order, the delivery note, and the invoice. This is often called three-way matching, and it is how a business catches an overcharge or a short delivery before paying for it.
The PO number is the thread that ties them together. When the invoice quotes the same PO, and the delivery note lists what actually arrived, approving payment becomes a quick check rather than a guess.
