Purchase Order
What is a purchase order?
A purchase order (PO) is a document a buyer sends a vendor to authorize a purchase and set the quantity, price, and terms. It creates a record of what was approved before the invoice arrives.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that matches vendor bills to approved purchase orders, so only authorized spending is paid.
How purchase orders are used
- Approve the purchase before the vendor delivers
- Match the vendor's bill to the PO and the delivery record, see three-way match
- Close the PO once the work is delivered and billed
Why it matters for service firms
For service firms, POs are most useful for subcontractors, software, and larger purchases. They create a clear approval trail and make it easier to catch duplicate or unauthorized bills before payment.
Frequently asked questions
Is a purchase order the same as an invoice?
No. A purchase order is issued by the buyer before the purchase to authorize it. An invoice is issued by the vendor after the work to request payment. Matching the two helps prevent overpayment.
When should a small firm use purchase orders?
Use them for purchases above a set amount, for subcontractors, and for anything that needs approval from more than one person. A simple threshold policy keeps the process light while protecting cash.
Related terms and guides: three-way match, accounts payable, vendor management, and audit trail.