It’s all about maintaining the balance, isn’t it? And the same can be implied when it comes to managing your business as well. Whether small or large business, every trade goes through the billing and invoicing related process. Few of the terms such as ‘Purchase Order’, ‘Invoice Estimates’, etc sometimes can confuse you and tend to make mistake in the business process.

In business, you need not only stay on top of your income and expenditure but also creates a perfect balance so as to yield the growth of the company. To know the details of your income and expenditure, you’ll have to rely on two sets of different documents namely, purchase order and invoices. These two documents represent a different set of parts of this process and consist of information.

Hence, it is quite important to know these terms and remember the key difference between them. In this informative guide, we bring you the differences between the purchase orders and invoices.


The Invoicing Process


In the invoicing process, the buyer prepares the purchase order document to show his intent for the sale, which implies that you wish to buy goods or services from the supplier. The seller than issues an invoice upon completing the job or service and also confirming the price agreed upon as per the purchase order, followed by the payment transaction for the same in accordance with the agreed terms.

The Invoicing Process - Moon Invoice

In a broader sense, these two documents might look like comprising of similar information and mostly relate to the agreement set by the two parties. There is some common information which can be seen are as follows:


  • Cost
  • Item reference
  • Service(s)
  • Contact information

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Purchase Orders


Purchase ordersare drafted documents representing a contract. It has all the information pertaining to the terms of delivery of services or goods along with the price. Sometimes, in few purchase orders, one can even find pre-requisites conditions agreed by both the side prior to forming a contract.

A Standard Purchase Order generally consists of the following information:


  • Order date
  • PO number
  • Product details ordered
  • The contact information of a buyer
  • The contact information of a seller
  • Terms and conditions
  • Signature of issuing authority




While purchase orders are created at the beginning of the trade, invoices which indicate the confirmation of sale is drafted at a later stage upon near completion of the job. It also marks the initiation of payment or financial transaction to close the particular trade between buyer and seller. Invoices represent the purpose of a seller to get paid as per the terms mentioned and agreed. Invoices usually list the payment type and method with the buyer’s information. It also specifies the amount owed, payment date along with the due date.

Invoices - Moon Invoice

A Standard Invoice generally consists of the following information:


  • Invoice issue date
  • Invoice & PO number
  • Seller’s name and address
  • Buyer’s name and address
  • A number of goods ordered
  • Amount of each good
  • Discounts/taxes
  • Total/Final amount due
  • Terms and conditions
  • Authorized signature
  • Payment due date


Key Difference Between Purchase Orders (P.O) and Invoices


                                                      Purchase Orders                                                                                                                                  Invoices   

Prepared by buyer Prepared by seller
Consist of product/services ordered by a buyer Consists of price of goods, products and/or services provided
Terms and conditions Terms and conditions
Order date Payment due date
Has PO number Has both PO and Invoice number
Might contain pre-requisite conditions Contains shipping/delivery details




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