Difference Between Purchase Order vs. Invoice

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Main Difference

Both the terms invoice and purchase order are related to the buy/sell records of different enterprises. These are the business records that are carefully handled by the buyers and sellers. People often intermix both these terms and use them as synonymous, but both the terms are quite different. Purchase Order is the statement raised by the buyer, it possesses the contract of sale i.e. details of goods, terms and conditions, date of issue, and name & address of their enterprise. On the other hand, the invoice is the document raised by the seller, it possesses the information regarding the payment of the goods delivered. The invoice also has the purchase order number written on it along with the price, quantity and discounts (if any) given to the seller for the commodities or products delivered.

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Comparison Chart

Purchase OrderInvoice
DefinitionPurchase Order is the document that holds information about the demand and other terms and conditions by the buyer.Invoice is the document that is a bill of the products delivered by the seller to the buyer.
Issued ByThe purchase order is a document issued by the buyer, and it is sent to the seller.The invoice is issued by the seller, and it is sent to the buyer.
Elements & InformationThe purchase order states the information about the name and address of the buyer and it asks for the quantity of different products with the subject to the rate provided by the seller.invoice holds detailed information about the taxes (if any), discounts (if any), payment due date and payment method.
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What is Purchase Order?

The purchase order is also known as PO or the contract of sale, the buyer raises it to the seller. It mainly states the number of different products a buyer is asking from the seller. The concept of this document is mainly seen in between the two enterprises as one avails the other enterprise with goods so they can further sell them by keeping their margin profit. The seller in this case is mostly the big wholesaler or the merchant, who provides his products to small companies and shops. The purchase order states the information about the name and address of the buyer and it asks for the quantity of different products with the subject to the rate provided by the seller. When bargain or different terms and conditions regarding the price, delivery and payment option is selected, the purchase order is the official documents in this regard that has written terms and conditions written on it along with the signature of both the enterprises or companies.

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What is Invoice?

Invoice is the document that is raised by the seller to the buyer after the goods or the demanded order is delivered to the asked destination. It holds comprehensive details about the products including the pricing, payment due date and the purchase order number. In other words we can say that the invoice is the bill of the products sent by the seller to the buyer after the issuance of the delivered products, whereas purchase order is the demand made by the buyer to the seller after agreeing to the terms and conditions. Invoice is the comprehensive document in terms of the pricing and payment method between the seller and buyer as compared to the purchase order as it holds detailed information about the taxes (if any), discounts (if any), payment due date and payment method. It also tells about the quantity of the products delivered to the seller’s destination. The purchase order umber is also written prominently on the invoice.

Purchase Order vs. Invoice

  • Purchase Order is the document that holds information about the demand and other terms and conditions by the Buyer, whereas invoice is the document that is a bill of the products delivered by the seller to the buyer.
  • The purchase order is a document issued by the buyer, and it is sent to the seller. On the other hand, the invoice is issued by the seller, and it is sent to the buyer.
  • The purchase order states the information about the name and address of the buyer and it asks for the quantity of different products with the subject to the rate provided by the seller. Contrary to this, invoice holds detailed information about the taxes (if any), discounts (if any), payment due date and payment method.

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