Purchase Order vs Invoice: Understanding the Difference

If you are a small business owner, chances are that you make purchases on a regular basis. While it is essential to keep track of all your expenses, some purchases may require more attention than others. This is especially true when it comes to invoices and purchase orders. These two financial tools are often confused with each other, but they have key differences that can affect your bottom line.

What is a purchase order?

A purchase order is a document that allows a buyer to request goods from a seller. It’s used when the buyer and seller are not in the same location, so it’s an official document that must be signed by both parties before any goods can be shipped or delivered.

The purchase order will include details about what items you want to buy, how much they cost and when they should arrive (if applicable). Create a purchase order online to make the process of purchasing items simpler. 

The invoice also serves as a means of collecting payment for those goods or services. An invoice usually contains all the necessary information to identify the buyer and seller, as well as the goods or services being provided. It also has a statement that details what payment is due for those goods or services.

What is an invoice?

An invoice is a document that a buyer uses to pay the seller. It contains details about the purchase order, such as quantities, prices, and payment terms. 

It also records when and how much money was paid or will be paid by the buyer to settle an outstanding account balance with their supplier or vendor.

With the advent of technology, it has become easier than ever for buyers to invoice generate online.

What Is the Difference Between Purchase Order and Invoice ?

A purchase order is a document that contains the details of the goods, services or works to be purchased from a seller by a buyer. It is used as an agreement between two parties (the buyer and seller) where one party agrees to purchase certain items from the other party at an agreed price.

An invoice is also considered as an important business document because it contains details about what was purchased and when payment should be made for these purchases.

It is also a legal document and should be treated as such by both parties. The invoice is used to record any payments made during a business transaction, whether they are made by cash or credit card.

An invoice is important because it records the payment terms and conditions of a transaction between two parties. It also serves as proof that the buyer has received what he or she purchased from the seller.


When it comes to understanding the difference between purchase orders and invoices, it’s helpful to know what each document is used for. The best way to do that is by looking at their similarities and differences.We hope you found this guide to be helpful. We know that understanding the differences between a purchase order and an invoice can be confusing, but we’re here to help! 

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