Solo Biz Soft Editorial Team A large client may ask for a purchase order (PO) number before they will pay you. If you have not met one before, it can be confusing. Here is what a purchase order is and how it fits with an invoice.
The difference
| Purchase order | Invoice | |
|---|---|---|
| Sent by | The buyer | The seller |
| When | Before the work or purchase | After delivery or at milestones |
| Purpose | Authorises the purchase and agrees price | Requests payment |
| Contains | What is ordered, quantity, agreed price, PO number | What was delivered, amount due, payment details |
How it works in practice
- You agree the work and price with the client, often with a quote.
- The client’s finance team issues a purchase order with a PO number.
- You do the work.
- You send an invoice that quotes the PO number.
- The client matches the invoice to the PO and pays.
Tips for freelancers
- Ask early whether the client uses purchase orders, and get the number before you start.
- Put the PO number on the invoice. Without it, some companies cannot pay.
- Make sure the amounts on the PO and the invoice match, or explain any difference.
Make a quote with our free quote generator and see invoice vs receipt vs quote for the other documents.
Frequently asked questions
Is a purchase order legally binding?
It can form part of a contract once accepted. Check the terms and get advice if the amount is large.
What if the client does not give me a PO number?
Ask for one. Their accounts team may not be able to pay without it.
Do small businesses use purchase orders?
Some do, but they are most common in larger organisations.
Related reading: Invoice vs Receipt vs Quote · Freelance Invoice Example
This article is general information, not legal or tax advice. Rules differ by country, so check what applies to you.