What is the difference between a Bill, a Purchase Order and a Payment?

A Purchase Order is what you ordered. It commits nothing financially and does not appear in your accounts.

A Bill is what your supplier has charged you. It creates a payable and shows in your accounts from the bill date.

A Payment is money leaving your account to settle a bill.

The normal sequence is Purchase Order, then Goods Received when the items arrive, then Bill when the supplier invoices you, then Payment when you pay.

You do not have to use every step. Recording a Bill and a Payment is enough for a business that does not raise orders.

Try it in the live demo: Raise a bill

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