What is a Purchase Order and how it is different from an Invoice

1. What is a Purchase Order and how it is different from an Invoice? Purchase order and invoice are two mostly confusing financial terms and they can often seem like synonyms. Both, purchase orders and invoices are your commercial communication about goods and services. But their time of occurrence is different. Although they are quite similar, they have a few differences which must be understood clearly. What is PO? The purchase order (PO) is a document indicating the types, number of products and services to be purchased. It details the items to be purchased for a certain price. It also includes the payment terms, shipment, other associated terms, and conditions. The customer sometimes creates a standing PO. The standing or blanket PO allows a company to order the same product multiple times using the same PO number over an extended purchase period. PO includes: ➢Issue date of a purchase order ➢Client’s information ➢Supplier’s information ➢Purchase order number ➢A detailed list of goods and services ordered ➢Terms and conditions

2. Invoice An invoice is a document issued by a seller to a buyer indicating items sold, prices, date of shipment, delivery and payment terms. It is also called a “bill”, “statement” or “sales invoice”.The term invoice indicates money the buyer owes to a seller. Importance of An Invoice Invoices are a great way to track your earnings, business, and expenses. It gives you a view of the sale of products for inventory management and calculates the amount of profit made. If invoices are utilized properly, they may act as documentation for all your business transactions. Invoice reports help you to show which orders are completed and paid for and the total outstanding for the customers. Besides that, you have complete financial control of your business and ongoing progress. A suitable invoice system created by Invoicera is used in creating and scheduling client invoices with ease. Why does a company need Purchase orders? ▪To set clear business expectations ▪It helps the business managing orders ▪It helps in managing business budgets There Key Differences Between Purchase Order and an Invoice:

3. Why does a company need an invoice? ➢It is an enabler for businesses to receive money ➢Invoices update incoming payments Invoicera is an Online Invoicing Software with more than 14 years of experience and handles Purchase Order Management, serving more than 3 million businesses worldwide. Auto Invoicing helps in creating and managing every business purchase order and invoice. It also lets you save every communication to keep a clear tab of all your records. It comes with online time tracking, payments, expense management, recurring/subscription billing, client/vendor panels, workflows, multi companies, multilingual & multi-currency support, staff permissions, financial reporting & analysis, purchase order management, subcontractor billing and time management, comprehensive reporting and APIs for 3rd party integration. Source: https://www.invoicera.com/blog/invoicera-tips-and- tricks/difference-between-a-purchase-order-and-an-invoice/