The different kinds of orders explained

You get sales orders, purchase orders, and other kinds of orders.  What is the difference between them?  What is the difference between an order and an invoice?  These are questions that people often ask, so we thought we would give you some answers.

The bottom line is that when you accept the order of a vendor or customer you conclude an agreement with that vendor or customer – on their terms.  And whenever a customer or vendor accepts your terms, you conclude an agreement with that customer or vendor on your terms – which is ultimately what you want every time you conclude an agreement. In practice, people often accept terms without considering them properly and end up with a very unfavourable agreement.

people often accept terms without considering them properly and end up with a very unfavourable agreement

Kinds of Orders

Let’s look at the different kinds of documents that may be issued between a customer and vendor:

• An invoice is a document issued by a vendor to a customer that usually indicates the price and payment methods for goods or services. It is usually a document in addition to  the purchase or sales order. The purchase or sales order will contain the terms of the agreement between them. The vendor must therefore make sure that any terms specified in the invoice, which are also dealt with in the purchase or sales order, correspond with the purchase or sales order terms.
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  Tags: invoice, orders, purchase order, sales order