CONTRACTOR GLOSSARY · MONEY & BILLING
What is a Purchase order (PO)?
A purchase order is a numbered document authorizing a purchase — matching supplier invoices to a PO is how contractors verify they're billed only for what was ordered, at the agreed price.
A PO states what's being bought, for which job, at what price, before the money is spent. On the buying side it's cost control: the supplier invoice gets matched against the PO (and ideally the delivery ticket) before payment. On the selling side, larger GCs often issue POs to subs for defined scopes — and their AP department won't pay an invoice that doesn't reference the PO number.
Small subs often run informally without POs — fine until quantities and prices start drifting from quotes. Even lightweight PO habits (numbered orders per job, quoted prices attached) give you the reference point that turns "that's not what we agreed" from a memory contest into a document comparison.
Common questions
Why does invoice-to-PO matching matter?
It catches price drift, quantity errors, and duplicate billing before payment — comparing what the supplier billed against what was actually ordered and quoted.
Related terms
RevnuPros tracks the thing, not just the word
Permits to sign-off, T&M tags to signature, materials to billed through, retainage to released — built for subcontractors. Browse the full contractor glossary or the Massachusetts permit guide.
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