Purchase Order vs Invoice: What’s the Difference
By FreeBillKit Team · September 20, 2026
A purchase order is sent by the buyer to authorize a purchase before it happens; an invoice is sent by the seller to request payment after the goods or services are delivered. Different documents, different direction, different point in the transaction.
The confusion usually comes from procurement teams: a supplier delivers goods, references “the PO,” and the buyer’s accounts team waits for “the invoice” to actually pay. Anchor the difference to who sends it and when, and it stops being confusing.
What is a purchase order?
A purchase order (PO) is a document the buyer creates to formally request goods or services from a supplier, before any delivery happens. It lists what’s being ordered, the quantity, the agreed price and delivery terms. Once the supplier accepts it, a PO becomes a binding commitment to buy on those terms. See what is a purchase order for the full breakdown.
What is an invoice?
An invoice is a document the seller sends after delivering the goods or services, requesting payment. It lists what was actually supplied, the amount owed and the payment due date. Many invoices reference the original PO number so the buyer’s accounts team can match the two documents before paying. New to invoicing? See how to write an invoice.
Purchase order vs invoice, side by side
| Purchase Order | Invoice | |
|---|---|---|
| Sent by | Buyer | Seller |
| Purpose | Authorizes a purchase | Requests payment |
| When it’s issued | Before delivery | After (or at) delivery |
| What it shows | Agreed order & terms | Amount now owed |
| Money owed yet? | No | Yes |
| Accounting role | Purchase commitment | Accounts payable trigger |
When you send a purchase order
Before you buy. A PO gives the supplier a clear, written record of what you’re ordering and on what terms, which protects both sides if there’s a dispute later about price or quantity. It’s most common in B2B procurement, where formal paper trails matter for approvals and budgeting.
When you send an invoice
After you’ve delivered the goods or completed the work. The invoice is what actually starts the payment clock, referencing the PO number (if one exists) so the buyer can confirm the delivered goods match what was ordered before releasing payment. This check is sometimes called PO matching.
A quick example
A retailer sends a supplier a purchase order for 200 units at $12 each, on Net 30 terms. Three weeks later the supplier ships the order and sends an invoice for $2,400, referencing the PO number. The retailer’s accounts team checks the invoice against the original PO and the delivery, then pays. The PO started the deal; the invoice collected on it.
Do you need both?
For one-off or informal purchases, often just an invoice is enough. Purchase orders earn their keep in recurring B2B buying, where a formal record of what was agreed protects against price disputes, short deliveries or scope creep, and where larger organizations require a PO on file before they’ll approve any payment at all.
Mistakes worth avoiding
- Treating a purchase order as a bill. It authorizes a purchase; it doesn’t request payment.
- Sending an invoice with no PO reference when the buyer’s process requires PO matching, which can delay payment for weeks.
- Changing quantities or pricing after the PO is issued without a formal amendment, which creates a mismatch when the invoice arrives.
Make both, free
Create a purchase order to place an order, then an invoice once it’s fulfilled. Both download as clean PDFs, no signup. Want to see one first? Here’s a purchase order example and an invoice example.
Frequently asked questions
Is a purchase order the same as an invoice?
No. A purchase order is sent by the buyer to authorize a purchase before delivery. An invoice is sent by the seller to request payment after delivery. They move in opposite directions.
Does a purchase order mean payment is due?
No. A PO is a commitment to buy on agreed terms. Payment isn’t due until the seller issues an invoice for the delivered goods or services.
Do I need a purchase order to send an invoice?
No, plenty of invoices are sent with no PO involved. POs are common in B2B procurement where formal approval trails matter, but many small businesses invoice directly without one.
What happens if the invoice doesn’t match the purchase order?
Most accounts teams will hold payment until the mismatch is resolved, whether that’s a quantity, price or item discrepancy, since the invoice is meant to reflect exactly what the PO authorized.
Who creates the purchase order, the buyer or the seller?
The buyer. It’s their formal request to purchase, which the seller then accepts (often by fulfilling the order) before invoicing against it.
Written by the FreeBillKit team.