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Sales order › Sales order vs purchase order
Sales order or purchase order: who sends which
The same deal makes several papers. The buyer writes a purchase order, the seller confirms it with a sales order, goods go with a challan, and the invoice comes last. Knowing which is which keeps your records and the buyer's in step.
The difference at a glance
| Purchase order | Sales order | Tax invoice | |
|---|---|---|---|
| Who issues it | Buyer | Seller | Seller |
| What it says | "Please supply this" | "We accept and will supply this" | "We supplied this; this is due" |
| GST due because of it? | No | No | Yes, if the seller is registered |
| Goes into GSTR-1? | No | No | Yes |
| Accounting entry | None | None | Sale and amount due |
| Number series | Buyer's (PO/…) | Seller's (SO/…) | Seller's invoice series |
A purchase order and a sales order are business records, not GST documents. GST is linked to the supply and the tax invoice. Still, together they show that an order was placed and accepted, which helps a lot if there is a dispute about price, quantity or date.
The flow from order to bill
- Enquiry and quotation. The buyer asks; you send a quotation from the quotation maker.
- Purchase order. The buyer sends their PO. (If you are the one buying, the purchase order maker makes yours.)
- Sales order. You confirm with a sales order quoting their PO number. Status: Open.
- Dispatch. Goods leave with a tax invoice, or with a delivery challan where the invoice follows later. An e-way bill is needed when the consignment value is above the limit (₹50,000 in most cases; some states set their own limit for movement within the state).
- Invoice. Press Make invoice on the sales order. Status: Invoice made.
Do you need a sales order if the buyer sent a PO?
Not by law, but it is good practice when:
- you change anything from their PO: price, quantity, date, a substitute item;
- the order is large or made to order, so you want their agreement in writing before you buy material;
- the order will be delivered in parts over weeks;
- the order came by phone or WhatsApp and there is no PO at all.
Worked example
A school in Chandigarh sends PO SCH/26/118 for 60 desks at ₹3,800. You can supply only 40 by the date asked and the rest two weeks later. Your sales order SO/26-27/021 lists 60 desks, value ₹2,28,000, CGST 9% ₹20,520 + SGST 9% ₹20,520, total ₹2,69,040, and in Notes: "40 desks by 20 Nov 2026, 20 desks by 4 Dec 2026, as discussed." The school replies "OK" on WhatsApp, and both sides now have the same plan. Part deliveries explains the rest.
Keep the numbers linked
Every later paper should point back to the one before it. The sales order quotes the buyer's PO number; the challan and the invoice quote the sales order and the PO. When the buyer's accounts team checks your bill, they match it against their PO first. If the PO number is missing or wrong, the payment often waits until someone sorts it out.