Difference between purchase order and invoice

A purchase order (PO) is a document that is issued by a buyer to a seller for the purpose of indicating their intention to purchase certain products or services. An invoice is a document issued by a seller to a buyer summarising the products or services that they have purchased (or have agreed to purchase).

Whereas POs are sent before delivery or payment, invoices can be sent before or after the delivery of products or services, and typically include a payment due date. An invoice can also be sent after a PO has been agreed.

An invoice becomes a legally-binding document, detailing a debt owed by the buyer to the seller, once it has been agreed to.

The details contained on a PO and an invoice are similar. The invoice will usually reference a PO number (if there has been one) to assist with record keeping and avoid confusion. However, an invoice will usually not include the technical details of the order might be included on a PO.

[edit] Related articles on Designing Buildings Wiki

• Accounting.
• Bill.
• Cash flow.
• Invoice.
• Letter of intent.
• Purchase order.
• Record keeping.
• Subcontractor vs supplier.
• Supplier.
• Supply chain.
• The benefits of e-procurement in construction.