Do you also find it difficult to differentiate between purchase orders and invoices? At times even the procurement members have contrasting opinions and definitions.
You can use payment processing software for business and make better sense of your financial documents. This will help you address the finer points and expedite your operations. Besides, you will also be well-versed with procurement processes and make huge profits.
Automatic online expense tracker helps you create both purchase orders and invoices and help you to keep your business expenses in check. So, without further ado, let us understand these terms better.
What Is A Purchase Order?
An official document that a buyer sends to a vendor that they can track and manage the entire purchasing process is known as a purchase order. Once the vendor accepts it, it becomes legal binding.
Further, these orders list items that a buyer is likely to purchase and pre-agreed prices.
Here are the following things you need to have in a purchase order.
- PO number
- Purchase date
- Details of the buyer
- Order information
- Terms of payment
- Delivery address
You can use payment processing software for business or small business expense tracking software for creating accurate purchase orders.
What is an Invoice?
Now that you are clear on what a purchase order is let us know what an invoice is. It is a payment request sent by vendors to their buyers once they have fulfilled their promise orders. An invoice consists of a list of goods or services you have delivered and clarifies the amount of money that your buyer is liable to pay you.
Usually, an invoice has vendor information, invoice number, the total amount due, and payment schedule.
Purchase Order Vs. Invoice
The major difference is that buyers send a purchase order to vendors to manage the purchasing process. At the same time, an invoice is an official payment request that vendors send to buyers once a particular project or order is completed.
|Order confirmation is sent by the buyer. Vendor gives the final approval.||Invoice is an official document that acts like a payment reminder|
|Purchase order lays down the terms of a purchase.||Invoice acts as a confirmation of a sale.|
|Prevents overstocking of supplies in the short and long run.||Invoices help you prevent the cases of overpayments.|
|Simplifies inventory management process.||Invoices help you calculate your expenses and taxes.|
Why Do You Need Purchase Orders and Invoices?
Most businesses use payment processing software for business and small business expense tracking software to generate their invoices, purchase orders and record clients payments very easily. While both of them may look like a burden to you, in the long run they will help you manage purchases and enjoy a great buyer-seller relation and streamline your finances.
So, it is not easy to choose one among the two, as both have their own advantages. While invoices look great from a legal point, purchase orders eliminate conflicts by providing clarification.
Irrespective of whether there is change in demands and the purchasing process is simple or complex, POs can help you streamline your communication and lay out clear expectations.
Now, you might wonder how you can manage them digitally. Well, you can use payment processing software for business if you are starting out your operations you can use small business expense tracking software.
As your organization grows in size, you will need to make more purchases. So, having a good understanding of purchase orders and invoices will help.
When you start receiving purchase orders and invoices in bulk, you will find it necessary to use software for capturing all data points. Luckily, you don’t need to invest in complex systems and spend hours training your teammates.
Small business expense tracking software can help you smoothen your procurement process and enhance the speed and efficiency of these functions.
Expense tracking solutions and payment processing software can help you extract data from all kinds of invoices and pay orders. Besides, these tools are designed to work in sync with other finance and accounting tools. Thus, providing you with reliability and flexibility.
Now that you know why you should use payment processing software for business, you must consider scheduling a demo and knowing about the best solutions. This will help you understand these tools better and streamline your organizational finances.