Concept Definition
What is a purchase order?
A purchase order (PO) is a commercial document issued by a buyer to a supplier formally authorizing a purchase of goods or services at agreed terms. It specifies quantities, descriptions, prices, and delivery terms. In automated AP workflows, invoices are matched against POs to verify legitimacy and accuracy.
How does a purchase order relate to e-invoicing?
Purchase orders are the foundation of two-way and three-way matching in automated AP workflows. E-invoices reference the PO number, enabling automated validation that invoice line items, quantities, and prices match the authorized purchase.
- PO number on invoice: Links invoice to authorized purchase. Mandatory in many B2G e-invoicing contexts.
- Two-way matching: Invoice data matched against PO. Quantity and price must agree.
- Three-way matching: Invoice matched against PO and goods receipt note. Delivery must be confirmed.
Frequently Asked Questions
- Is a PO number required on an e-invoice?
- In public sector (B2G) e-invoicing, a PO number is typically mandatory. In B2B, it is usually required by the buyer's AP process. Peppol BIS Billing 3.0 supports the BuyerReference field (BT-10) for this purpose.
- What is a blanket purchase order?
- A blanket PO authorizes multiple deliveries over a period rather than a single transaction. Invoices reference the blanket PO number and the specific release or delivery. Blanket POs are common in recurring service or supply arrangements.