The key distinction is direction: Buyer → Seller for a purchase order; Seller → Buyer for an invoice.
A purchase order usually goes from buyer to seller; an invoice goes from seller to buyer. The PO communicates what the buyer intends to order. The invoice bills for goods or services supplied, or for another agreed billing point.
| Feature | Purchase order | Invoice |
|---|---|---|
| Usually issued by | Buyer or purchasing team. | Seller or supplier. |
| Direction | Buyer → Seller. | Seller → Buyer. |
| Purpose | Requests or authorizes a purchase under the buyer’s process. | Requests payment for an agreed supply or billing milestone. |
| Typical timing | Before or when the buyer places an order. | After supply or at the agreed billing point. |
| Useful shared reference | PO number, items, quantities, agreed pricing and delivery details. | The PO number, invoice number, supplied items, amounts and payment terms. |
Why the PO number may appear on an invoice
A buyer may require its PO number on the supplier’s invoice so the purchasing or accounts-payable team can match the bill to the order. The supplier should verify that quantities, descriptions and prices are consistent with the agreed order or approved changes before sending the invoice.
Example
A restaurant sends a purchase order to a produce supplier for 20 crates of apples. After delivery, the supplier issues an invoice to the restaurant, referencing the PO number and the quantity supplied. The PO is the buyer’s order; the invoice is the seller’s request for payment.
Create a purchase order as a buyer or a seller invoice for billing.
Frequently asked questions
Who issues a purchase order versus an invoice?
A purchase order is typically created by the buyer for a supplier. An invoice is issued by the seller to request payment from the buyer.
Should an invoice reference a purchase order?
When the buyer issued a PO, include that reference so both sides can match orders, deliveries and payments.
General information only—not legal, tax or accounting advice. Requirements can vary by jurisdiction, transaction and agreement. Confirm what applies to your situation.