Purchase order or invoice: which paper is the promise

In one line. A quotation offers, a purchase order commits, and an invoice asks to be paid — three papers in a fixed sequence, and only the middle one is where the buyer says yes.

The confusion is understandable because all three carry the same numbers. Same items, same quantities, same total, often the same reference. What differs is who wrote each one and what act it records, and that is the whole distinction.

Set them in order and they stop overlapping.

What a quotation is

A quotation comes from the seller, before anything is agreed. It says: here is what we would supply, at this price, on these terms, and this offer holds until a stated date.

The parts that matter are the ones people skim. What is included and what is not. How long the price is good for. Whether tax and delivery are in the figure. And the terms the quotation attaches itself to, which are usually a set of terms of sale referred to rather than printed.

A quotation is not a promise by the buyer. Nobody has committed to anything by receiving one. It is an offer sitting on the table with a shelf life.

What a purchase order does

A purchase order comes from the buyer, and it is the moment of commitment.

It says: supply these things, at this price, to this address, by this date, and we will pay according to these terms. It carries its own number, which is why the number then appears on everything afterwards — the delivery note, the invoice, the statement — so that three departments can talk about one transaction.

This is the paper where the agreement is usually formed, and it is also where the terms question gets decided. A purchase order that references the buyer's purchase order terms and a quotation that references the seller's terms of sale are two documents pointing at two different rulebooks for the same deal. Which set applies is a real question, it is settled by what the papers say and how each side responded, and it is worth resolving before the goods move rather than after.

What an invoice is for

An invoice comes from the seller, after the work is done or the goods have shipped, and it is a demand for payment against an agreement that already exists.

It names what was supplied, references the order it came from, states the amount, states when payment is due, and says how to pay. It is a record and a request. It is not the agreement, and it does not create one — an invoice for something nobody ordered is an invoice for something nobody ordered.

The payment terms on an invoice are worth a second look, because they are commonly the seller's terms restated rather than the ones the buyer committed to. An invoice can say payment is due on receipt while the order it references says payment is due at the end of the month following delivery. Both figures are printed with equal confidence, and the one that governs is the one both sides actually agreed, not the one on the most recent piece of paper.

That is the most useful thing to know about invoices in this context: they document the last stage rather than the first one. If the arrangement between the two sides was never written down anywhere, an invoice does not retroactively supply the missing terms. It supplies a number and a date.

Which of the three is the agreement?

Usually the order, read together with whatever terms it validly attaches.

The sequence in most business-to-business buying runs: quotation offers, purchase order accepts and commits, delivery happens, invoice asks for the money, payment closes it. The agreement is formed in the middle of that chain, and the paperwork on either side of it either sets up the offer or records what followed.

Where it gets less tidy is when the chain is skipped. A phone call and an invoice. An order raised against a quotation that had already expired. An acknowledgement from the seller that quietly restates the terms. In each of those the same question applies as anywhere else — which words did both sides actually agree to, and where are they written — and the parts a contract usually names is the checklist for finding out.

None of the three, incidentally, is a signature. Papers move through a buying process by being issued and referenced rather than signed, which is a different mechanism from putting a name to a document; accepting is not signing is about that difference.

At the door. contracts.io makes paper, not legal advice. Describe what you sell and read back terms of sale, a quotation or a set of purchase order terms in plain language, each naming its governing law from the full list — England and Wales, Germany, New York or wherever the trade actually sits. Everything the site can describe is in the templates catalogue.