PO Number
What is it
Purchase Order (PO) Number. A unique reference number provided by the buyer to authorize the purchase. It links the invoice to the buyer's internal procurement system.
When is it required
When the client issues a Purchase Order. Large companies often refuse invoices without a matching PO number to prevent unauthorized spending.
Mandatory use cases
While small businesses might operate informally, specific sectors strictly enforce "No PO, No Pay" policies.
- Government Contracts (UK/EU/USA): Public funds require strict audit trails. Invoices without POs are automatically rejected.
- Large Corporate Enterprises: Automated Accounts Payable (AP) systems cannot process an invoice if it doesn't match a pre-approved PO number in their system.
Impact of missing PO
| Scenario | Outcome | Resolution Time |
|---|---|---|
| Govt / Enterprise | Automatic Rejection. The invoice is returned unpaid. | High (Weeks/Months) |
| SME / Small Business | Manual Delay. Bookkeeper stops to ask who authorized the spend. | Medium (Days/Weeks) |
| Freelancer / Informal | None. Often paid on trust or email confirmation alone. | Low (Hours) |
Common pitfalls
- Invoicing before receiving the official PO number. This leads to payment delays.
- Typing the number incorrectly, causing payment rejection. The match must be exact.
- Proceeding with work based on a verbal promise instead of a written PO. Verbal orders are hard to prove.
Common mistakes when filling the field
- Confusing the PO number with the invoice number. They are distinct identifiers.
- Placing it in a hidden or obscure part of the document. It must be visible for the Accounts Payable team.
- Omitting it when the client explicitly requested it. This guarantees the invoice will be returned.
Why is it there
It connects the invoice to the client's internal approval system. It serves as proof that the expense was authorized. It speeds up the approval process.