PO vs Invoice: Essential Differences and AP Automation‍

Purchase Order (PO)
- Issued by: Buyer
- When: Before goods/services are delivered
- Purpose: Official order document specifying what you want to buy
- Part of: Accounts Payable (AP, buyer's side)

Invoice
- Issued by: Seller
- When: After goods/services are delivered
- Purpose: Request for payment
- Part of: AP (buyer's side) and Account Receivable (AR, seller's side)

Why You Need Both

POs Help You:
- Control spending before it happens
- Track ordered items
- Set clear expectations with vendors
- Maintain legal documentation
- Manage budgets effectively

Invoices Help You:
- Process payments accurately
- Track accounts payable
- Maintain tax records
- Verify delivery of goods/services
- Take advantage of early payment discounts

Common Pain Points Without Automation
1. Manual data entry errors
2. Lost documents
3. Slow approval processes
4. Duplicate payments
5. Missing early payment discounts
6. Poor spend visibility

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How AI Automation Helps

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Benefits
- 90% faster processing time, no human labour required (only for reviews)
- Near-zero data entry errors
- Automatic three-way matching (protects your business by comparing item details between invoices, purchase orders, & payments)
- Real-time visibility into spending
- Better cash flow management
- Early payment discount capture

Main Features to Look For
1. Automatic data extraction
2. PO-Invoice matching
3. Exception handling
4. Integration with accounting systems
5. Mobile approvals
6. Audit trail

Getting Started with Automation

1. Assess Your Current Process
  - How many POs/invoices do you process monthly?
  - What's your current processing cost?
  - Where are the bottlenecks?

2. Pick the Right Solution
  - Must integrate with your existing systems
  - Should be easy to use
  - Must handle your document volume
  - Should include mobile access

3. Implement in Phases
  - Start with basic PO-Invoice matching
  - Add automated approvals
  - Enable supplier portal access
  - Integrate with payment systems

POs and invoices serve different but complementary purposes in your procurement process. While POs control spending upfront, invoices trigger payments. Automating both streamlines your entire procurement process, saves time, reduces errors, and gives you better control over company spending.

Need help automating your PO and invoice processes? Reach out to wayne@giraffeguru.com for a free 30 minute consulting call to learn how our AI-powered invoice automation can transform your procurement workflow.