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In this video tutorial, the differences between a purchase order (PO) and an invoice are explained. A purchase order is the initial formal document created by the buyer and sent to the seller to initiate a purchase. Once accepted by the seller, it becomes a legally binding contract and specifies the type, quality, quantity, and rate of the goods desired. An invoice, on the other hand, is a commercial document issued by the seller after goods have been delivered, notifying the buyer that payment is due. The key distinction is that a purchase order serves to order goods, while an invoice serves as a confirmation of sale and authorizes payment. Basic differences between the two are summarized in a tabular format.