Purchase Order vs Invoice: What's the Difference?
A purchase order is created by the buyer to order goods; an invoice is created by the seller to request payment. Here's how they differ and work together.
Purchase orders (POs) and invoices are both essential documents in business transactions, but they sit at opposite ends of the process and are created by different parties. Understanding the difference keeps your buying and selling organised and your records clean.
The key difference
A purchase order is created by the buyer and sent to the seller to officially request goods or services. An invoice is created by the seller and sent to the buyer to request payment after those goods or services are delivered. In short: the PO starts the order, the invoice closes it.
What's on a purchase order?
- A unique PO number
- The buyer's and seller's details
- A description of the goods or services ordered
- Quantities and agreed prices
- Delivery date and terms
What's on an invoice?
- A unique invoice number (and the matching PO number)
- The seller's and buyer's details
- What was actually delivered, with quantities and prices
- Tax and the total amount due
- Payment due date and methods
How they work together
- 1The buyer issues a purchase order to confirm what they want to buy.
- 2The seller accepts the PO and delivers the goods or services.
- 3The seller sends an invoice that references the PO number.
- 4The buyer matches the invoice to the PO and pays.
Referencing the PO number on your invoice is the single most important tip for getting paid by larger companies — their finance teams can't process an invoice they can't match to a PO. Always ask for the PO number before you invoice.
Frequently asked questions
What comes first, a purchase order or an invoice?
The purchase order comes first. The buyer issues a PO to order goods or services; the seller then delivers and sends an invoice requesting payment, usually referencing the PO number.
Who creates a purchase order?
The buyer creates the purchase order and sends it to the seller. The seller creates the invoice and sends it back to the buyer.
Do I need a purchase order to send an invoice?
Not always. Many small transactions skip the PO entirely. But when selling to larger companies, they often require a PO number on your invoice before they'll process payment.
Create your invoice now — free
Invoices, receipts, and quotations. Add your logo, apply tax, download a PDF in seconds. No signup.
Open the free generatorKeep reading
How to Make an Invoice: Step-by-Step Guide (2026)
A clear, no-jargon guide to making a professional invoice that gets paid — what to include, the exact steps, and a free tool to do it in seconds.
How to Invoice a Client as a Freelancer
Everything a freelancer needs to invoice clients professionally and get paid on time — plus a free freelance invoice template.