Short answer
A purchase order comes from the buyer’s side to state an order; an invoice comes from the supplier’s side to request payment. The federal purchasing example makes the sequence explicit: the government offers to buy on specified terms, and the contractor bills for delivered supplies or performed services. 1
On this page
At a glance
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| Question | Purchase order | Invoice |
|---|---|---|
| Who issues it? | Buyer; government in the FAR example | Contractor or supplier |
| What does it do? | Offers to buy on specified terms | Requests payment |
| Where does it fit? | Ordering stage | Billing stage |
| How are they linked at IU? | Supplies the PO reference | Must identify the PO |
These comparisons draw on federal definitions and IU’s supplier-invoice procedure, not a single nationwide business-document standard. 1 2
What each thing is
A purchase order communicates a proposed purchase and its terms. The FAR’s definition specifically concerns government orders using simplified acquisition procedures. An invoice communicates a payment request under the contract. IU’s procedure makes that request concrete through itemization, an amount due, and supplier identification. 1 2
Key differences
The central difference is direction and purpose, not simply document appearance. The buyer offers to purchase; the supplier bills. Their legal roles also differ in the federal example: the FAR recognizes purchase orders under which a contract becomes effective through written acceptance or performance, while defining an invoice as a payment request under the contract. 1
How to tell them apart
Ask who issued the document and what it asks the recipient to do: supply something on stated terms, or pay a billed amount? Do not classify it solely by a PO number. IU requires that number on invoices, so its presence identifies a connection to an order—not necessarily the document’s type. 1 2
Where they overlap
Both documents can concern the same purchase and supplier. IU explicitly connects them by requiring the invoice’s supplier name to match the purchase order and requiring the PO number on the invoice. That shared reference helps identify the transaction while preserving the distinction between ordering and billing. 2
Edge cases
A purchase order is not necessarily just an informal preliminary note. In the federal framework, an order can become an effective contract through acceptance or performance. Conversely, an ordinary undisputed invoice is not automatically a formal contract-disputes claim. Those are federal distinctions, not conclusions about every private transaction. 1
Why the distinction exists
The documents answer separate questions: what is being ordered, and what payment is being requested? IU’s invoice requirements connect those questions by requiring a PO reference alongside itemization and an amount due. The ordering document and billing document therefore remain distinguishable even when they describe the same goods or services. 1 2
Common misconceptions
An invoice is not proof that payment has already occurred: its defined function is to request payment. Nor does putting a PO number on an invoice turn it into an order. IU requires both the PO reference and the supplier’s own invoice number and date. 1 2
Examples
Hypothetical federal purchase: an agency issues a purchase order for office chairs; after delivery, the contractor submits an invoice. The first offers to buy, and the second requests payment. 1
Hypothetical IU purchase: a supplier submits an itemized bill showing an amount due and an IU PO number. Despite that reference, it remains an invoice because it bills the university. 2