Purchase order vs invoice: what importers need to know
The short answer
The difference between a purchase order and an invoice comes down to who sends it and when. A purchase order (PO) is the buyer’s order, sent before the goods are made; an invoice is the seller’s bill for those goods. If you import from overseas factories, there are usually three documents, not two: your purchase order, the factory’s pro forma invoice (a quote in invoice form that confirms the price and asks for a deposit), and the commercial invoice (the final bill that ships with the goods).
On this page
Most guides to this question are written for office purchasing and accounting teams, where the PO and the invoice are the whole story. This one is written for importers. It explains what each of the three documents does, the order they arrive in, and where they drift apart when a specification changes after the factory has quoted. The example is a furniture order, but the sequence is the same for other goods made to order overseas.
Purchase order vs invoice: three documents, not two
In a domestic purchase, the sequence is short: you send a PO, the goods arrive, and the supplier invoices you. If you have read an invoice vs purchase order guide written for accounting teams, that is the sequence it describes. An overseas order adds a document in the middle, because the factory usually wants a deposit before it buys materials and starts production. Not every order follows this pattern; a straight repeat of a stock item may skip the middle step, but for goods made to specification the pro forma invoice is standard.
Here are the three documents in the order they appear.
1. The purchase order: your commitment
You issue the purchase order. It records what you are buying and on what terms: the item, its specification (size, materials, finish), the quantity, the price per unit, the currency, the payment terms (how much is due and when), and the date you need the goods to ship. It is your record of the deal and the document your team checks every invoice against.
Some importers skip a formal PO and confirm orders by email or chat. In that case, the factory’s pro forma invoice becomes the only written version of the order.
2. The pro forma invoice: the factory’s version of the order
The factory replies with a pro forma invoice, also written proforma invoice and often shortened to PI. “Pro forma” is Latin for “as a matter of form”: the document looks like an invoice, but it is a quote in invoice form rather than a final bill. It restates your order in the factory’s own words and numbers, including descriptions, prices, the expected ship date, and the deposit it needs (the share of the order value paid upfront so production can start).
Because the factory writes it, the PI is where small differences from your PO can creep in, such as a wood species, a dimension, or a carton count. For a closer look at how the two documents compare, see our guide to purchase order vs proforma invoice.
3. The commercial invoice: the final bill
When the goods are ready to ship, the factory, or the exporter shipping on its behalf, issues the commercial invoice. It lists exactly what is in the shipment, the price of each item, and the total. Depending on your payment terms, you pay the balance (the rest of the order value after the deposit) against the commercial invoice or the shipping documents.
The commercial invoice also goes to customs. In the US, Customs and Border Protection (CBP) uses it to assess duty, the tax charged on imported goods. Federal rules require it to describe the goods, including their grade or quality, and to show the purchase price of each item. Your customs broker, the licensed specialist who files your import paperwork with CBP, works from it.
Side by side, the three documents look like this:
| Item | Purchase order | Pro forma invoice | Commercial invoice |
|---|---|---|---|
| Issued by | You, the importer | The factory | The factory or its exporter |
| When | First, before production | After the factory reviews your order, before production | When the goods ship |
| What it says | What you want to buy, at what price, on what terms | What the factory will make, at what price, and the deposit it needs | What actually shipped and what it costs |
| What it starts | The factory’s pro forma invoice | Your deposit and the start of production | Your balance and customs clearance |
| Who relies on it | Your team, and the factory when it quotes | You and the factory | You, your customs broker, and CBP |
The basic difference between a purchase order and an invoice still holds. Importing adds a second invoice before production, and with it one more version of the order to keep in line every time something changes.
What each document should show
| Document | What to look for on it |
|---|---|
| Purchase order | PO number and date; item codes and full specifications (size, materials, finish); quantity; unit price and currency; payment terms; required ship date; packing and labeling requirements |
| Pro forma invoice | PI number, revision number, and your PO number; the specifications as the factory understands them; quantity, unit price, and total; the deposit amount and balance terms; the factory’s bank details; expected ship date; how long the quote is valid |
| Commercial invoice | Invoice number, with your PO and PI numbers; a detailed description of the goods, including grade or quality; quantity shipped and the price of each item in the purchase currency; charges such as packing, freight, and insurance, listed by name and amount; country of origin; seller and buyer; the US port the goods are entering through |
The commercial invoice items in the last row come from the federal rules for import invoices, which list a few more details your customs broker can confirm for your products.
A walkthrough: 200 custom dining tables and one finish change
Here is how the three documents move through a typical furniture order, and what happens to each one when the specification changes after the pro forma invoice is issued. The prices are illustrative, chosen to keep the math simple.
Step 1: You send the purchase order
Example
Your purchase order, PO-1042, is for 200 solid oak dining tables, 72 inches long, in a natural oak finish with a clear matte lacquer, at $300 each. The total is $60,000. Your payment terms are a 30% deposit before production and the balance before the tables ship.
Step 2: The factory sends the pro forma invoice
The factory replies with its pro forma invoice for the same order: 200 tables, natural oak, matte lacquer, $300 each, $60,000 in total, and an $18,000 deposit due before production starts.
Before you pay the deposit, check the PI against your PO line by line. The factory has rewritten your order in its own words, and this is the cheapest moment to catch a difference. The differences that slip in tend to be small:
- Materials: “solid oak” on your PO becomes “oak” or “oak veneer” on the PI.
- Dimensions: inches converted to centimeters and rounded.
- Finish: a color name or code that does not match the approved sample.
- Packing: knock-down (shipped in parts for assembly at the destination) instead of fully assembled, or a different number of cartons per table.
- Terms: a different deposit percentage, a different currency, or a price quoted at the factory gate rather than delivered to the port.
In this order, everything matches, so you send the $18,000 and the factory schedules production.
Step 3: The finish changes
Two weeks later, the factory sends a finish sample, a small wood panel that shows the exact color and sheen of the finish. Your team decides the collection needs a darker look and asks for a walnut stain instead. The factory agrees, but staining adds a step in production, so the new price is $315 a table and the ship date moves back a week.
Now all three documents need to reflect the change:
- The pro forma invoice should be reissued as revision 2 (walnut stain, $315 each, $63,000 in total). The $18,000 deposit stays credited, so the balance rises from $42,000 to $45,000.
- Your purchase order should be updated to match, either as a revised PO or as a change order (a short document that amends the original PO).
- The commercial invoice does not exist yet, but it will need to be built from revision 2.
Common mistake
Here is what can happen instead. The change is agreed in an email thread or a WeChat or WhatsApp chat. The factory updates its production sheet, but the PI is never reissued, or it is reissued and sits unread in someone’s inbox. Your PO still says natural oak at $300. You and the factory now hold different versions of the same order, and nothing on paper says which one is current.
Step 4: The tables ship with a commercial invoice
When the tables are packed, the factory’s export team prepares the commercial invoice. Whether it says walnut at $315 or natural oak at $300 depends on which version of the order they work from.
If any of the three documents was not updated, the mismatch shows up now, when it is hardest to fix:
- Your balance stalls. Your accounts team compares the commercial invoice with your PO. If the PO was never revised, a correct $63,000 invoice looks like a $3,000 overcharge, and the balance waits while someone searches old messages for the approval.
- Customs gets the wrong value. In the US, the value declared for duty is generally the price actually paid or payable for the goods. A commercial invoice built from the first PI shows $60,000 for tables that cost $63,000, and it describes a finish that is not in the cartons. Both are problems to sort out with your customs broker.
- The two sides disagree on the balance. If the factory expects $45,000 and your team expects $42,000, the only record of what was agreed may be a chat message from weeks earlier.
One finish change, three documents to update
Illustrative order: 200 custom dining tables
How to keep the three documents in line
Whatever tools you use, five habits keep the documents aligned:
1. Check the pro forma invoice before paying the deposit.
Compare descriptions, specifications, quantities, unit prices, payment terms, and the ship date against your PO.
2. Put every change into a revised pro forma invoice.
A chat message is not enough. Ask the factory to number each revision and to show the deposit already received, so the balance is always clear. The US government’s export guidance makes the same point from the seller’s side: changes to a pro forma invoice should not be made without the buyer’s consent. If a revision arrives with new bank details, confirm the change by phone with a contact you already know before you send money.
3. Update your PO when the PI changes.
Issue a revised PO or a change order, so your accounts team checks invoices against the current version rather than the first one.
4. Match the commercial invoice before paying the balance.
Compare it line by line with the latest approved PI and your PO, along with the packing list (the factory’s list of what is in each carton).
5. Send your customs broker the final version.
Make sure the commercial invoice your broker works from reflects the final specification and price.
For the full process from quote to shipment, see our guide to purchase order management for importers.
How neet keeps the documents from drifting apart
Nobody in the walkthrough did anything unusual. Each side kept its own copy of the order: your PO in your system, the factory’s pro forma invoice in its system, and the change in a chat thread. Every revision created another copy, and the copies drifted apart.
neet is purchase order management for importers and brands, built around one shared order instead of separate copies. Your supplier builds its pro forma invoice in neet, and the order lives there, so your team and the factory’s team work on the same order rather than trading files. When the finish changes, the supplier revises that order: revision 2 sits alongside revision 1, both sides see which version is current, and your team approves the order once it is right.
Because the order is built in neet rather than passed around as files, there is one current pro forma invoice instead of copies in two inboxes. When the commercial invoice arrives at shipment, you check it against that approved version, with the full history of how the order got there.
Purchase order vs invoice FAQ
Is a purchase order the same as an invoice?
No, they are two different documents: the purchase order is the buyer’s request to buy goods on stated terms, and the invoice is the seller’s bill for those goods. In importing, a pro forma invoice also sits between the two, confirming the order and requesting a deposit before production starts.
What is the difference between a purchase order and an invoice?
The buyer issues the purchase order first, before the goods are made or shipped, to set out what it wants, at what price, and on what terms. The seller issues the invoice to state how much is owed and when payment is due.
How do you match an invoice with a purchase order?
Compare the invoice with the purchase order line by line, checking descriptions, specifications, quantities, unit prices, and totals, and add a record of what was received if you use three-way matching. For imports, match the commercial invoice against your PO and the latest approved pro forma invoice, so a change agreed during production does not look like an error.
Can you invoice without a purchase order?
Yes, a seller can issue an invoice without a purchase order, although many companies will not approve an invoice that does not reference one. When an importer orders by email, the factory may issue a pro forma invoice with no PO behind it, which leaves the factory’s document as the only written record of the order.
Do you need a purchase order before an invoice?
Not always, since plenty of purchases are invoiced without one, but sending the purchase order first is good practice because it is your record of what you agreed to buy. With an overseas factory, the PO also gives the factory a clear specification to price before it issues the pro forma invoice.
Read next
Purchase orders
How to track purchase orders with overseas suppliers
Purchase order tracking for an overseas order means following it through every stage, not only the shipment.
· 9 min read