Purchase Orders Explained: A Guide for Small Businesses
If you sell to larger companies, you will meet purchase orders. Understanding how POs work — and putting the PO number on your invoice — is the difference between getting paid in two weeks and getting paid in two months.
What a purchase order is
A purchase order is the buyer’s official commitment: “we will buy X at price Y.” It carries a PO number that the buyer’s finance team uses to match your invoice to their internal approval. No PO number on your invoice often means no payment until someone manually investigates.
POs typically show the buyer’s details, the supplier’s details, line items with quantities and agreed prices, delivery terms, and the all-important PO number.
Working with POs as a supplier
Always ask for the PO number before starting work for corporate clients, and quote it on every related invoice. If the PO covers only part of the work, clarify what the remainder bills against before you begin.
When you receive a PO, check it against your quote immediately — quantities, prices, and scope. Discrepancies caught now are a quick email; caught at invoicing, they are a payment delay.
Frequently asked questions
Do freelancers need to issue purchase orders?
No — POs come from the buyer to you. But when you buy from suppliers for a project, issuing your own POs keeps your costs documented and controlled.
What if a client will not provide a PO number?
Get written approval of your quote by email instead, and reference that approval on your invoice. Something traceable beats nothing.
Can I invoice more than the PO amount?
Not without an amended PO or written approval for the difference. Invoicing above the PO value is a classic cause of rejected invoices.
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