Purchase order

A customer's formal instruction to supply. Often the thing that makes an invoice payable.

What it means

A purchase order is a document issued by a buyer specifying goods or services, quantities and prices, and carrying a unique number.

Why it matters

Many larger organisations will not pay an invoice without a valid PO number on it, and will not raise a PO retrospectively. Work done without one can be genuinely unpaid.

What it looks like in practice

Get the PO before starting. Check the value covers the whole job, and get it varied before exceeding it.\n\nA PO can also be the document that incorporates the buyer's terms rather than yours.

What to watch out for

Doing extra work on an existing PO. The invoice exceeds the PO, the system rejects it, and the conversation happens after the work.

Where to get proper advice

A commercial solicitor. For a clause you rely on regularly, one properly drafted set is cheaper than one dispute.