Purchase Order vs Invoice: What's the Difference?

These two are often confused because they cover the same transaction — but they're issued by opposite parties, at opposite ends of it.

A purchase order comes from the buyer

Before any goods or services change hands, the buyer sends a purchase order (PO) to the seller: a formal commitment to buy specific items, at agreed quantities and prices. It's how a buyer's procurement process authorises a purchase internally before money is spent.

An invoice comes from the seller

After the order is fulfilled (or as it's being fulfilled), the seller sends an invoice back — a request for payment for what was actually delivered, referencing the original PO.

Why the PO number matters

A well-run invoice includes the original PO number. That's what lets the buyer's accounts team match what they agreed to pay for (the PO) against what they're now being billed for (the invoice) — catching quantity or price mismatches before payment goes out. Without it, that reconciliation becomes a manual back-and-forth.

Quick reference

• Purchase order — sent by the buyer, before fulfilment, a commitment to buy
• Invoice — sent by the seller, after (or during) fulfilment, a request for payment

When you don't need a PO at all

Smaller, one-off purchases or informal client relationships often skip the PO step entirely and go straight to an invoice — POs earn their keep mainly in larger organisations where procurement needs a paper trail before spending is approved.

Issuing a PO to a supplier? Use our Purchase Order Generator. Billing for a completed order? The Invoice Generator handles that side, itemised line by line.