Did you know that up to 39 percent of invoices get paid late in the United States of America? Many people across the country tend to get confused when it comes to an invoice vs. purchase order. If you plan on running your own business then it is important that you know the difference between the two.

If you’re providing a service then odds are that you’ll want to know how to create an invoice for the services that you’ve rendered as a way to let the customer know what is owed. The good news is that you’ve found the right spot for learning the difference between an invoice and a purchase order.

Keep reading this article to learn more today!

online invoice generator

What Is an Invoice?

An invoice is a request of payment that your business sends out to customers that purchased goods or services from you. You need to create an invoice and send it out to the customer once the order gets fulfilled. The invoice should show the services performed or goods purchased and how much each one costs.

Your invoice needs to include an invoice number, your vendor information, any discounts included, the total money owed, and the date that it is due. If you’re nervous about creating an invoice then you can use a free online invoice generator.

Look at the invoice as a reminder to your customers about the money that they owe your business for the goods or services that they bought. The invoice only gets created and sent out when the order gets fulfilled. You should create an invoice when you want to prevent overpayments or duplicate charges for your customers.

Purchase Order

What Is a Purchase Order?

A purchase order is different from an invoice because it involves a document that is meant to help the customer track the progress of the purchasing process. Purchase orders have the potential to become legally binding contracts once the vendor accepts the purchase order.

The purchase order often includes a good amount of information for the buyer. It should include the list of goods or services that the customer is purchasing from your business. Make sure that order quantities are included along with the prices that you’ve agreed to with the customer.

Think of the purchase order as an order confirmation that you’re sending to the customer after they make the decision to purchase something from you. You should look to create the purchase order when your customers submit an order to your business.

Invoice vs Purchase Order

Now You Know the Difference Between an Invoice vs. Purchase Order

When you run a business it is important to know the difference between an invoice vs. purchase order. You shouldn’t create an invoice until after the order gets fulfilled and the customer receives the goods or services that they bought. A purchase order is meant to help customers track the ordering process and includes information about quantity and cost for your customers.

For more helpful and informative articles like this one, make sure you check out our blog.

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