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In this video tutorial, the differences between a purchase order (PO) and an invoice are explored. A purchase order is the initial formal document created by the buyer to offer a purchase to the seller, serving as a legally binding contract upon acceptance. It specifies the type, quality, quantity, and rate of goods desired. Once the goods are delivered, the seller issues an invoice, which is a commercial document notifying the buyer that payment is due. The key difference is that a purchase order is used to order goods, defining selling terms, while an invoice confirms the sale and authorizes payment. The tutorial also presents these differences in a tabulated format.