Purchase order vs invoice
Last reviewed
The buyer sends a purchase order before delivery to say what they want. The supplier sends an invoice afterwards to ask for payment.
The short answer
A purchase order is sent by the buyer, before delivery, to say what they want to buy and at what price. An invoice is sent by the supplier, after shipping, to ask for payment. The PO commits you to an order; the invoice tells you what you owe. Each should match the other.
Side by side
| Purchase order | Invoice | |
|---|---|---|
| Who sends it | The buyer | The supplier |
| When | Before the goods ship | After the goods ship (or a deposit invoice before) |
| What it says | What you want, how many, at what price, by when | What was supplied and how much to pay |
| Reference number | PO number | Invoice number, quoting your PO number |
| What it does | Commits you to an order once accepted | Asks for payment |
How they fit together
- You raise a purchase order. Our free purchase order template covers every field.
- The supplier confirms it and, if your terms include a deposit, sends a deposit invoice.
- The goods ship and arrive. You record what you received.
- The supplier sends the final invoice, quoting your PO number.
- You check the invoice against the PO and against what arrived, then pay.
Why matching matters
Matching the invoice to the PO and the goods received is called a three-way match. It catches the common, expensive mistakes:
- Short deliveries: you’re billed for 840 units and 800 arrived.
- Price creep: the invoice says $6.80 a unit when the PO agreed $6.40.
- Duplicates: the same invoice arrives twice, or a deposit isn’t deducted.
What goes wrong without POs
Ordering by email or chat works until something is disputed. Without a PO there’s no agreed price or quantity to point to, invoices can’t be checked, and you can’t see what stock is already on order. That last gap leads to ordering the same SKU twice. A PO for every order fixes all three, and it’s also the record that tells you your real supplier lead time.
Frequently asked questions
Is a purchase order the same as an invoice?
No. The buyer sends a purchase order before delivery to say what they want to buy. The supplier sends an invoice afterwards to ask for payment. They describe the same goods from opposite sides of the sale.
Which comes first, the purchase order or the invoice?
The purchase order. You raise it, the supplier confirms it and ships, and then the supplier invoices you. A deposit invoice (sometimes called a pro forma invoice) can arrive before shipping when the payment terms ask for one.
What is a three-way match?
Checking that three documents agree before you pay. They are the purchase order (what you ordered), the goods received note (what arrived) and the invoice (what you are being charged). It catches short deliveries, wrong prices and duplicate bills.