Invoice vs Purchase Order: What's the Difference and When to Use Each

A purchase order (PO) is sent by the buyer to the seller to request goods or services. An invoice is sent by the seller to the buyer to request payment. In a typical B2B transaction, the PO comes first (before work starts) and the invoice comes last (after work is done).

Think of it this way: a purchase order says 'I want to buy this.' An invoice says 'You bought this — now pay me.'

A purchase order is a formal offer from a buyer to a seller, specifying the types, quantities, and agreed prices for products or services. Once the seller accepts the PO, it becomes a legally binding contract.

POs are common in B2B transactions, especially with larger companies that have procurement processes. The buyer's accounting department uses PO numbers to match incoming invoices against approved purchases — a process called 'three-way matching' (PO + receiving report + invoice).

An invoice is a commercial document issued by the seller to the buyer, requesting payment for goods or services already delivered. The invoice references the original PO number (if applicable) and includes payment terms.

Our invoice generator creates professional invoices with all required fields. If your client provided a PO number, include it prominently on the invoice — this speeds up their payment process significantly.

In a typical B2B workflow: the buyer sends a PO, the seller accepts and delivers the goods/services, the seller sends an invoice referencing the PO number, the buyer matches the invoice to the PO and receiving document, then pays. This matching process prevents fraud and ensures buyers only pay for approved purchases.

If you're a freelancer or small business selling to larger companies, always ask if they need a PO before you start work. Invoicing without a PO number is the #1 cause of delayed B2B payments.