A purchase order (PO) is a document you send to a vendor BEFORE you receive goods or services. It formally requests items, specifies quantities, and locks in pricing. Think of it as your shopping list with legal weight—it creates a binding agreement on agreed terms.

An invoice, by contrast, is what the vendor sends YOU after delivering goods or services. It requests payment based on what was actually delivered (which might differ from what you ordered). The invoice is the "bill" requesting money.

When should you use a purchase order? Any time you're making a significant business purchase—office equipment, software subscriptions with committed spend, bulk inventory, or contracted services. A PO protects both parties: you're guaranteed the price you agreed to, and the vendor is guaranteed a committed buyer.

For freelancers, POs are especially useful when working with agencies or larger clients who have formal procurement processes. Many enterprise companies literally cannot pay you without a PO number attached to the invoice. Creating professional POs signals business maturity and makes you look like a real company—because real companies use POs.

The key takeaway: a PO goes FROM you TO your vendor (before the purchase). An invoice goes FROM your vendor TO you (after the purchase). Eonebill helps you manage both documents, keeping your financial records organized and making tax time dramatically less painful.