Late payments continue to be one of the biggest frustrations for small businesses. In the UK, 62% of small businesses reported being owed money from unpaid invoices, with an average of £21,400 owed per business, according to recent research from QuickBooks.

In this blog, we explain how using a purchase order (PO) can help you avoid long delays, reduce stress and create a more reliable path to getting paid. A Purchase Order might feel like extra admin at first, but it is one of the simplest tools you can use to protect your business and steady your cash flow.

What is a Formal Purchase Order?

A handshake is good, but a Formal Order is better. Many small businesses start work as soon as a customer says yes. Verbal agreements can feel quicker at the time, but they can also lead to frustration later.

Larger companies often will not pay an invoice unless it includes one of their own purchase order numbers. If your invoice does not contain this number, it is likely to be put on hold without anyone notifying you. It may sit in the system for weeks, simply because it cannot be matched to an approved order.

This is why requesting a purchase order before you begin any job is so important. A PO confirms that the work has been internally approved and gives you something concrete to reference when you invoice.

What Is a PO Number?

A purchase order is created by your customer and outlines exactly what they are asking you to provide. It confirms the goods or services, the agreed price, the timeframe and the payment terms. Each purchase order includes a unique PO number so the customer’s accounts team can track it easily once your invoice arrives.

When you include the PO number on your invoice, their team can match it to what was already approved. This is the part that speeds up the process and allows your invoice to be paid without unnecessary delays.

Why a Purchase Order Is Important

A purchase order is more than just a form. It is a binding document that protects both you and your customer. Once a PO has been issued, it records what was agreed and removes confusion over the scope or the price. This clarity reduces the chance of a dispute and makes it simpler for the finance team to confirm that your invoice is correct.

If you do not include a valid PO number, your invoice may not be processed at all. Larger companies often follow strict procedures, and anything outside that procedure is paused. This means you may not even know there is a problem until you start chasing payment. If the person who hired you has left the business, obtaining a purchase order afterwards becomes even harder and delays become longer.

By building purchase orders into your process, you help avoid these situations and move closer to being paid on time.

How Missing POs Delay Your Payment

A missing purchase order is one of the most common reasons an invoice is not paid when expected. When this happens, you may have to go back to the original contact to request a PO, which takes time. If that contact is off sick, on holiday or no longer employed at the company, the delay can increase.

Invoices without a PO often sit untouched because they cannot be approved. This can be avoided simply by requesting the Purchase Order before work begins. It gives the customer’s finance team everything they need to approve your invoice promptly.

How the Purchase Order Process Works

The typical process is simple. The buyer creates and approves the purchase order internally. You then receive the PO and can start work knowing that the job has been formally agreed. Once the goods or services have been supplied, you send your invoice with the PO number included. Their finance team matches your invoice to the PO and approves payment.

This process protects both sides and helps create a reliable path from the agreement of a job to payment.

Benefits of Using Purchase Orders as a Supplier

A purchase order offers plenty of practical benefits. It helps you get paid faster because your invoice contains everything the accounts team needs to approve it. It also reduces the chance of a disagreement about what was agreed, as the purchase order confirms the details in writing. A PO can also be helpful if your main contact leaves the business, because it remains in the company’s system as proof that the work was authorised.

Using POs consistently helps your business look more organised and professional. It also supports better cash flow because payment becomes more predictable.

Manual PO Management vs Automated PO Management

Some small businesses track purchase orders manually through emails or spreadsheets. This can work, but it does increase the risk of losing track of PO numbers or mixing up details. Automated PO systems can make the process easier to manage because they store all purchase orders in one place and help match invoices more quickly.

Whether you use manual or automated tracking, the main goal is the same. Never start work without a valid purchase order from your customer.

Best Practices to Help You Get Paid on Time

It helps to develop a simple routine. Always request a Purchase Order before any job begins. Check the PO number is valid and make sure the details match what you agreed. Add the PO number clearly on your invoice. Keep a record of the Purchase Orders you receive and follow up early if payment becomes overdue.

If a client refuses to issue a Purchase Order, it is worth questioning why. Customers that avoid written confirmation often create payment problems later.

Why purchase orders help you get paid faster

In conclusion, purchase orders give you a clear and reliable way to make sure your work has been formally approved before you begin. When a customer issues a PO, you have written confirmation of the price, the scope and the terms they have agreed to. This reduces confusion, speeds up invoice processing and prevents your invoice sitting unpaid because it is missing the required reference. 

A purchase order also protects you if your usual contact leaves the company, because it remains on their system as proof that the job was authorised. By making POs a normal part of your process, you create a smoother path to being paid on time and protecting your cash flow. If late payments are already causing problems and you need expert help to recover what you are owed, contact My Credit Controllers today.