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What is the difference between a purchase order and an invoice?

The two documents are very similar. The main difference is that the buyer initiates the transaction by selling a purchase order to the seller. The purchase order lists out the items and quantity requested.

Once the purchase order is finalized and the order has been fulfilled, the seller will send an invoice to the buyer. Once the buyer pays the invoice, the transaction is complete.

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  • What is a purchase order (PO)?

    A purchase order is a document prepared by the company that lists out the items they want to purchase from vendors. Typically, the purchase order would be filled out by someone in the purchasing department and would then be approved by the Chief Financial Officer or equivalent individual. The purchase order is then sent to...

  • What is an invoice?

    An invoice is similar to a purchase order; however, it is sent from the seller to the buyer. It details out items purchased, shipping information, total amount due net of credits and discounts, as well as any other important information.