This is general information, not tax or legal advice. Rules and rates change, so check GOV.UK or ask an accountant.
A purchase order (PO) is a document you send to a supplier to order goods or services, stating what, how many and at what price. It is a commitment before any invoice exists.
PO vs bill
- The PO is your request.
- The bill is the supplier’s invoice to you.
Matching the two makes sure you pay only for what you ordered.
When you need one
- Orders above a set value.
- More than one person can buy for the business.
- Suppliers or customers (such as larger firms) require them.
- You want to know your committed spending, not just what has been billed.
A very small business buying occasionally may not need formal POs.
What to include
- A unique PO number and date.
- Supplier details and delivery address.
- Items, quantities and agreed prices.
- Payment terms and any tax.
The process
- Raise and approve the PO.
- Send it to the supplier.
- Receive the goods and the invoice.
- Check the invoice against the PO, then pay.
See approval workflows if spending needs sign-off.
How AvrioBooks helps
Create purchase orders, send them as a PDF or email, track their status and convert each into a bill. See purchase order software.
Frequently asked questions
What is a purchase order?
A document you send a supplier to order goods or services at an agreed price before any invoice exists.
Does a small business need purchase orders?
Not always, but they help once several people buy, or order values grow.
How is a PO different from a bill?
A PO is your order. A bill is the supplier's invoice to you.
Can I convert a PO into a bill in AvrioBooks?
Yes. Convert the order when the invoice or goods arrive.
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