When is it Generated? – Purchase orders are requests for goods/services.Who Sends? – A purchase order will be sent by the buyer to a vendor, whereas the vendor delivers invoices to the buyer.Here is an overview of how purchase orders and invoices differ: Differencesįirstly, let’s focus on the differences between the two documents. When there’s confusion between the two, confusion reigns, and mistakes are made. Master the differences to enhance the purchase order and invoice process.
So, what is the difference between a purchase order and an invoice? At first glance, they seem remarkably similar, but they are not. It may also include details regarding any discounts applied or a specific payment schedule. Standard invoices will include a detailed readout of goods and services delivered and the amount of money owed. Vendors send invoices after providing their products and services. On the other hand, an invoice is delivered after the vendor has fulfilled their part of the obligation. If there are any issues regarding the price, vendors may choose to negotiate before accepting the order and before the document becomes legally binding. It will include the date the purchase was made, the quantities of each product/service, and the agreed price. Purchase orders are designed to outline the goods and services requested by the buyer. The vendor may also reject a purchase order. Only when the vendor accepts the document does it become legally binding.
It is the buyer who is responsible for delivering the purchase order. This is an official document designed to kickstart the purchasing process.
Purchase orders are often known by the simple abbreviation of PO. In this guide, you will learn about the difference between PO and invoice documentation within the context of procurement. If you fail to understand the difference between purchase orders and invoice documents, you may fail to grasp the finer points of the company’s finances. Even veteran procurement teams may have different definitions of the two. Those new to the procurement process may struggle to differentiate between purchase orders and invoices.
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