Purchase order vs sales order vs invoice: what's the difference?

A purchase order, a sales order, and an invoice are three documents in the same transaction. They come from different sides of the deal and different moments in its life. Mixing them up is easy, because the same order wears all three names as it moves from request to fulfillment to payment. Here is what each one is and how they connect.

Purchase order (PO): the buyer asks

The purchase order starts the transaction. A buyer creates it to tell a seller what they want to buy, at what quantities and prices. It is a formal request and, once accepted, a commitment. The PO belongs to the buyer. When a customer emails you an order, you are looking at their purchase order.

Sales order (SO): the seller confirms

The sales order is the seller's side of the same order. When the seller accepts a PO, they create a sales order internally to confirm what they have agreed to deliver and to track it through fulfillment. Same line items, opposite perspective: the buyer's PO becomes the seller's sales order. It records the promise before anything ships.

Invoice: the seller asks for payment

The invoice closes the transaction. After the goods are delivered, the seller issues an invoice to request payment for what was shipped. Where the sales order opened the order, the invoice settles it. It references the same PO number so both sides can reconcile the request against the bill.

Side by side

How this maps to QuickBooks

For a distributor on QuickBooks Online, the inbound document is the customer's purchase order, and it is your sales-side order. Most distributors record it as an Estimate, then convert that Estimate to an Invoice when the goods ship. The catch: QuickBooks does not read the incoming PO. Someone opens the email, reads the PDF, and keys each line into the Estimate by hand. That step is the same whether the order came by EDI or email, and it is the one a tool like SideQuest removes by parsing the PO and drafting the Estimate for review. More on the manual cost is in what manual PO entry really costs.

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