What a PO is, when clients send them, what to do with one, and how to create your own. Everything freelancers need to know about purchase orders.
If you primarily work with startups or small businesses, you might go years without ever seeing a Purchase Order (PO). But the moment you land a corporate client, an agency, or a university, the first thing their accounting department will ask is, "What's the PO number on this?"
This guide explains exactly what a purchase order is, why big companies obsess over them, and how you should handle them as a freelancer.
What Is a Purchase Order (PO)?
A Purchase Order is an official document sent by a buyer (your client) to a vendor (you), authorizing a purchase. It outlines exactly what they are buying, the quantity, the agreed-upon price, and the payment terms.
Think of it as an official permission slip from the client's finance department. It says, "We have allocated budget for this specific project, and we promise to pay you this specific amount once the work is delivered."
Why Do Clients Use POs?
Small companies can buy things on a whim with a company credit card. Large companies cannot. They need strict budget controls to prevent departments from overspending.
When your point of contact at a large company wants to hire you, they can't just promise to pay you. They have to submit a request to their finance department. Finance reviews the request, checks the budget, and if approved, generates a PO Number. This number tracks the transaction from the initial request all the way through to your final payment.
Purchase Order vs. Invoice: What is the Difference?
It's easy to confuse the two because they contain almost identical information (line items, prices, totals). The difference is timing and direction:
| Document | Who Sends It? | When Is It Sent? | Purpose |
|---|---|---|---|
| Purchase Order (PO) | The Client | Before work begins | Authorizes the purchase & secures budget |
| Invoice | The Freelancer | After work is completed | Requests payment for the work |
What to Do When You Get a PO
If a client sends you a PO, here are the steps you must follow to ensure you get paid without delays:
- Review the details: Make sure the deliverables, price, and payment terms (e.g., Net 30, Net 60) match what you agreed upon in your proposal or contract.
- Accept it: Send a quick email confirming receipt and acceptance of the PO.
- Do the work: Complete the project as outlined.
- Put the PO Number on your Invoice: This is critical. When you send your final invoice, you MUST include their PO number prominently on the document. If you forget it, their accounting software will reject the invoice, delaying your payment.
When Should You Create Your Own PO?
Usually, the client creates the PO. However, if you are acting as an agency and hiring subcontractors (like a freelance illustrator or a developer to help with a large project), you become the buyer.
In this case, you should issue a Purchase Order to your subcontractor. This gives them peace of mind that you are committed to the project, and it keeps your own project budget organized.
Need to create one? Use our free Purchase Order Generator to create a professional PDF in minutes.