A purchase order (PO) is your client's official commitment to buy from you. It outlines exactly what they're purchasing, quantities, prices, and delivery terms. For freelancers and contractors, receiving a PO means the client has formally authorized the work — you can proceed with confidence knowing payment is approved.
Purchase orders protect both parties: clients get exactly what they ordered at agreed prices, and service providers have written authorization to bill for the work. Many large companies require POs for all purchases as part of their procurement process, and having a PO number can speed up payment processing.
Example
A marketing agency receives a PO for 'Social media management services - 3 months @ $3,000/month' with specific deliverables and deadlines outlined.
Why It Matters for Freelancers
Purchase orders provide security for service providers — they're written proof that the client authorized and committed to paying for your work before you start.
Related Terms
Proforma Invoice
A preliminary invoice sent before work begins, outlining the expected costs and payment terms.
Invoice
A document sent by a business to a client that lists goods or services provided and the amount due for payment.
Accounts Receivable
Money owed to your business by clients for work completed but not yet paid.
Purchase Order FAQs
Should I require purchase orders from clients?
For large projects or corporate clients, POs provide security. For smaller clients, a signed proposal or contract may be sufficient.
What if a client doesn't use purchase orders?
You can request one for large projects, or use written proposals and contracts to achieve the same protection.
How does a purchase order affect invoicing?
Reference the PO number on your invoice to help the client's accounting department process payment faster.
Master Business Terms with Professional Invoicing
Put your knowledge to work with professional invoices that use proper business terminology and payment terms.