[GTM glossary](/glossary.md) Purchase order Sales # Purchase order (PO) In short A purchase order (PO) is a formal document a buyer issues to a seller to authorize a purchase. It lists what is being bought, the quantity, the agreed price, payment terms, and a unique PO number. For sales teams, a PO usually signals that internal approval is done. It is also a common reason a signed deal sits in limbo: many companies will not pay an invoice unless it references a valid PO. ## What a purchase order contains * **PO number:** A unique reference used on the invoice so the buyer can match it to the approved spend. * **Items and quantities:** Products, plans, seats, or services being bought. * **Price and currency:** The agreed amounts, often copied from the quote or order form. * **Terms:** Payment terms, delivery or start dates, and billing contact. --- ## Purchase order vs. related documents * **Quote:** A seller offer. A PO is the buyer's acceptance and authorization. * **Order form:** A seller document the buyer signs. Some buyers still insist on issuing their own PO as well. * **Invoice:** A seller request for payment. It should reference the PO number. --- ## Where POs fit in the sales cycle In larger companies, procurement or finance issues the PO after the business owner approves a quote. Reps who ask about the PO process early avoid last-minute delays at quarter end. --- ## How to handle POs as a seller ### Ask early During evaluation ask: "Do you need a PO to pay an invoice? Who issues it, and how long does it take?" ### Match the documents Check that the PO matches the quote on price, quantity, term, and legal entity. Mismatches are a common cause of rejected invoices. ### Include the PO number on the invoice Without it, accounts payable may reject or delay payment. ### Track it in your CRM Add a field for PO required, PO status, and PO number so forecasts reflect real risk. --- ## Example Say a rep gets a verbal yes on the last week of the quarter. The buyer replies that procurement needs a PO first, which usually takes two weeks. Had the rep asked about it in the evaluation stage, the request could have started earlier and the deal might have closed on time. --- ## Common mistakes * **Treating a signature as a close:** If a PO is required, the deal is not complete until it arrives. * **Ignoring the legal entity:** A PO issued to a different entity than the one on your contract creates billing problems. * **Starting the PO request too late:** Add it to your mutual action plan with an owner and a date. --- ## Purchase order FAQs **What is a purchase order (PO) in sales?** A purchase order is a document a buyer sends to a seller to authorize a purchase. It lists items, quantities, agreed prices, and terms, plus a unique PO number that the seller should include on the invoice. **What is the difference between a purchase order and an invoice?** A purchase order is issued by the buyer to authorize a purchase. An invoice is issued by the seller to request payment. The invoice should reference the PO number so the buyer can match it to approved spend. **Why do buyers require a purchase order?** Purchase orders let companies control spending, confirm that budget is approved, and match invoices to authorized purchases. Many finance teams will not pay an invoice that has no valid PO number attached. **Is a purchase order the same as an order form?** No. An order form is usually prepared by the seller and signed by the buyer to accept terms. A purchase order is created by the buyer to authorize spend. Some buyers need both before they will pay. Share term --- ## More related phrases * [B2B sales](/glossary/b2b-sales.md) * [Buying process](/glossary/buying-process.md) * [Complex sales](/glossary/complex-sales.md) ## Similar phrases * [Master services agreement (MSA)](/glossary/master-services-agreement.md) A master services agreement (MSA) is a contract that sets the standing legal terms between a vendor and a customer, so later deals can close faster under one framework. * [Order form](/glossary/order-form.md) An order form is a short contract document listing what a customer is buying, including products, quantities, price, and term, typically signed under a broader master agreement. * [Mutual action plan](/glossary/mutual-action-plan.md) A mutual action plan is a shared, dated list of steps that buyer and seller agree to complete so a deal can move from evaluation to signature. * [Procurement](/glossary/procurement.md) Procurement is the buyer-side function that vets vendors, negotiates price and terms, and manages purchasing, which often adds steps late in a B2B deal. * [Statement of work (SOW)](/glossary/statement-of-work.md) A statement of work (SOW) is a document that defines the scope, deliverables, timeline, and fees for one specific project, usually governed by a broader master services agreement.