What is a PO number?

What the number actually represents

It is not a filing convention. In any organisation that separates the person who wants something from the person who pays for it, the order number is the record that somebody with authority committed the money. Behind the string sits an approval, a budget line and a person who can be asked about it. That is why finance treats an invoice without one as a request from a stranger: there is no approved commitment to match it against, so nobody in the payment chain can approve it without going back to find who ordered the work and whether they were allowed to. In a large organisation that search takes weeks, and it is nobody's priority except the supplier's.

Three way matching, briefly

The order says what was committed. The receipt or delivery evidence says what arrived. The invoice says what is being charged. When all three agree on quantity and price, the payment runs automatically. When they do not, the invoice drops into an exceptions queue where a human compares them and asks somebody a question. Every mismatch, however small, has the same effect: a partial delivery invoiced in full, a price that moved by a few dollars, a unit of measure recorded as boxes on one document and units on another. Suppliers who understand this stop arguing that the difference is trivial and start invoicing exactly what the order says, then handling the difference as a separate document.

Getting the number before you start

Ask for it at the point of accepting the work, not at the point of invoicing. A customer who cannot produce one at the start either has not raised the order yet, in which case the work is not really approved, or does not use them, in which case getting that confirmed in writing is worth doing. Retrospective orders are possible and awkward, because somebody has to explain why the commitment was made before the approval, and that person will not enjoy the conversation. For ongoing work, ask whether a blanket order can be raised for the period so that each invoice draws down against one reference rather than needing a new one every month.

Where to put it, and where not to

On the invoice, in its own labelled field near the invoice number, not buried in a description line, because most accounts payable systems read a specific field and some read the document automatically. Also on the delivery docket, the packing slip and any statement, so every document in the chain can be matched. Where one order covers several deliveries, quote the order number and the line numbers being invoiced. Where a job spans two orders because the scope changed, invoice them separately rather than combining, since a single invoice spanning two commitments cannot be matched cleanly against either and will be queried.

What to do when the invoice is already stuck

Find out which stage it is stuck at before doing anything, because the fix differs. No order number means asking the person who requested the work to raise one and give you the reference, then reissuing the invoice with it. A mismatch means agreeing which document is wrong and correcting that one, usually with a credit note and a fresh invoice rather than an amended copy. Missing receipt evidence means the goods arrived and nobody recorded it, which the requester can usually fix in a minute. Chasing accounts payable before knowing which of the three applies produces a polite reply and no movement, which is the experience most suppliers report. Keep a note on each customer record saying whether they use order numbers, who raises them and where the invoice should be sent, because the answers differ by customer and are almost never written down anywhere. Ten minutes filling that in across a customer list saves the same conversation being had from scratch every quarter by whoever happens to be chasing.

Questions people ask