Purchase order vs invoice
A purchase order is a buyer’s commitment to purchase. An invoice is a seller’s request to be paid. They are not two layouts of the same piece of paper, and swapping them is how small offices lose track of what they owe.
If you are about to create the buyer’s side, use the purchase order generator. If a supplier has already billed you, you are looking at an invoice, and the useful question is whether it matches an order you actually sent.
The short difference
| Purchase order | Invoice | |
|---|---|---|
| Who issues it | The buyer | The seller |
| When | Before the goods ship, or before the work starts | After delivery, or on the seller’s billing cycle |
| What it promises | We will buy this, at this unit price, on these terms | We delivered, or we are ready to, and this is the amount due |
| What a careful office does with it | Sends it, files it, and later matches the bill to it | Checks it against the order and the receipt, then pays or disputes |
Accounting people sometimes describe the PO as a commitment and the invoice as the moment a payable exists. You do not need that vocabulary to use the documents. You need to know which one you are allowed to edit. You edit yours. You do not silently edit theirs.
The chain in a small office
Someone inside asks for the thing. That request can be a sentence in chat. It is not yet a purchase order. The PO is the external document: number, vendor, lines, prices, ship-to, terms. The vendor ships or does the work. Somebody on your side notices what arrived. The vendor sends an invoice and, if they are organized, prints your PO number on it. You pay the invoice, not the PO.
Four names get used for three jobs, which is why this stays confusing. A requisition is internal. A purchase order is external. A receiving note is internal again. An invoice is external, from them. A credit note is their correction when the invoice was too high. A debit note, in some offices, is your request for that correction. You can run a ten-person firm without ever saying “debit note” out loud. You cannot run it if the only record of the price is a memory.
When you can skip a purchase order
Skip it when another document is already the commitment. Rent sits under the lease. A retained consultant sits under the engagement letter. A software subscription sits under the order form you clicked, whether or not you enjoyed clicking it. Recurring utilities rarely need a fresh number every month. Card charges under your written threshold do not need a PO if the receipt is filed and the threshold is real.
Do not skip it for a custom job, a large supply order, inventory you will resell, or any vendor who has “corrected” a bill by sending a second one. The PO is cheap. The argument about a missing unit price is not. If you are unsure, write the order. The field-by-field guide is shorter than a disputed invoice thread.
Why accounts payable asks for the PO number
The number is the join key. Without it, the person paying has to guess which email authorized the bill. With it, they open one document and compare quantity, unit price, and terms. That comparison is the three-way match when goods are involved, or a two-way match when the purchase is a service and there is nothing to count.
Put the number in the email subject when you send the PDF, and ask the vendor to quote it on the invoice. If they will not, decide whether you still want the relationship. A supplier who cannot print eight characters on a bill will also struggle with a shortage.
United States, United Kingdom, Canada
The commercial idea is the same in all three. The tax document is not. A UK VAT invoice and a Canadian GST/HST invoice have required fields that belong to the seller’s bill: registration numbers, the tax breakdown, and in some cases a specific label. A purchase order can show the rate you expect. It does not become a tax invoice because you typed a percent. Halden will not invent those registrations. If you sell, your invoicing tool has that job. If you buy, insist on their proper bill before you claim the tax.
Currency is the other quiet difference. A PO in Canadian dollars matched to an invoice in US dollars is not a rounding problem. It is a different price. Keep the currency code on both documents, and do not let a spreadsheet sum them into one “total spend” without a conversion you chose on purpose. The Halden ledger refuses to add currencies together for that reason.
A practical rule
If you wrote it, it is the order, and you may amend it with a new version or a written change before the vendor accepts. If they wrote it, it is the bill, and you may accept it, short-pay it, or ask for a revised invoice. You may not treat your PO as something they owe you money on, and you may not treat their invoice as permission to ignore what you ordered. The two documents meet in the match. They do not replace each other.