3 SIGNIFICANT DIFFERENCES BETWEEN AN INVOICE AND A PURCHASE ORDER

3 SIGNIFICANT DIFFERENCES BETWEEN AN INVOICE AND A PURCHASE ORDER

The Purchase Order (P.O) is a detailed list of deliverables and due date of the order, while an invoice includes the price, terms and conditions of payment, and the expected date of payment. A PO is generated when the customer places the order, while an invoice is generated after the order is complete.

In proper definition, an invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

On the other hand, a purchase order (P.O), is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services. It is used to control the purchasing of products and services from external suppliers.

A few differences between both documents are listed below:

  1. A purchase order is used to order goods/services from a seller while an invoice is used to demand payment.
  2. A P.O. is issued by a buyer while an invoice is issued by a seller.
  3. The P.O. comes first before the invoice the invoice.
  4. The P.O. carries the terms of purchase, while the invoice confirms and carries out those terms.

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