What is the difference between a purchase order (PO) and a non-purchase order (no PO)?

Question

Accepted Answer

PO (Purchase Order) and no PO (without Purchase Order) refer to different procurement processes in finance operations.

A Purchase Order (PO) is a formal document issued by a buyer to a seller, indicating the types, quantities, and agreed prices for products or services.
No PO transactions occur when purchases are made without a formal order, often leading to challenges in tracking and accountability.
Example of PO: A company issues a PO to a supplier for 100 units of a product at $10 each, ensuring a clear agreement.
Example of No PO: A department buys office supplies directly from a store without prior approval or documentation, complicating expense tracking.

Accepted Answer

PO Invoices

– PO invoices have an attached purchase order

– Mainly used for direct procurement

– Faster approvals and processing

– Greater transparency and accuracy

Non-PO Invoices

– Non-PO invoices do not have an attached purchase order

– Commonly used for indirect procurement

– Invoice approval is often slower

– Less transparent than PO invoices

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