If either party decides to increase the price, it can be disputed with the help of the initial price listed on the PO. Once the PO is signed, both parties should be clear on the price stated on the PO. Without a PO, you may end up making duplicate orders and suffering a loss. Why do you need a purchase order?Ĭarefully read through all the terms and details listed in the PO before signing it – the PO document becomes a legally binding contract after it’s signed by both companies.Īn accurate PO number allows you to see which goods were ordered, the person who made the order, and the actual date of the order. For example, you could request that the vendor sends the goods strictly by sea freight, or that you want to pay using a certain payment method. Your PO can also include extra prerequisites that you have agreed upon with the other party. A basic PO usually contains the following information: It’s critical for international merchants to know when and how to use purchase orders and invoices.Ī purchase order (PO) is a document that a buyer sends to a seller after ordering goods or services. Purchase orders and invoices contain details of your financial business activity – from order details and prices to vendor and shipping details.

This article will help you understand the differences between a purchase order and an invoice. This couldn’t be more misguided – purchase orders and invoices are used for very different reasons. As a result, the terms are used interchangeably. They both contain details of your business activity. They help you remain compliant, optimise your inventory management and keep track of your financial health.

Purchase orders and invoices form the backbone of sound business decision-making.

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