What is an invoice and what is a purchase order?
Unsure if you should submit an invoice or a purchase order? Are you not entirely sure what the difference is between the two? Good news — you’re in the right place.
The first step in a transaction often starts with one of two things — an invoice or a purchase order. But from your side of things, how can you be sure which to send? Let’s dive into the key differences between the two to give you a better idea of what each of these contracts does, how they work, and which is right for your circumstances.
What are you asking for?
Both an invoice and a purchase order are necessary documents that almost everyone will deal with, so depending on what you need tells you a lot about what they are and why they’re so important.
An invoice is a request for payment whereas a purchase order acts as a confirmation of an order. The simplest way to remember the difference between the two is to think about what you’re requesting. If you need to receive a payment, you’d send an invoice. If you want to receive goods or services, you’d send a purchase order.
When you should use an invoice vs. a purchase order.
If you’re hoping to receive payment for goods or services you provided — in other words, if you’re the vendor — you’d send the buyer an invoice.
If you’re trying to confirm an order of goods and services you’ve requested, odds are you’re the buyer and you’re trying to confirm your order with your vendor.
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