Paying suppliers quickly and accurately builds strong relationships, and strong suppliers help a business grow. Yet invoice approval is where many accounts payable teams lose time, and the problem looks different depending on whether an invoice references a purchase order.
Vendor invoices fall into two groups: purchase order invoices, which reference an order the buyer created, and non purchase order invoices, which arrive with no order behind them. Accounts payable teams use enterprise resource planning systems, accounts payable automation tools and, increasingly, ServiceNow to run approval workflows for both. This guide explains the difference and the practices that make each workflow fast and controlled.
What is a purchase order invoice?
A purchase order invoice is raised by a supplier against an order the buyer created. Accounts payable checks it against the order, confirming quantity, price and order number, in a two way match. Many organizations add the goods receipt for a three way match, confirming that what was billed was actually received.
Purchase order invoices typically cover direct goods and planned services: raw materials, components, equipment and contracted service work. Because the order was approved before the purchase, the invoice can often be approved automatically once it matches. See two way invoice matching.
What is a non purchase order invoice?
A non purchase order invoice has no order behind it. Common examples are utilities, rent, subscriptions, professional fees, travel and small purchases below a spending threshold. They are often used for indirect spend, discretionary purchases under a limit or urgent buys.
Because nothing was approved in advance, someone must confirm the purchase was valid and code it to the right cost center or internal order. That usually involves a preparer, who enters and codes the invoice, and an approver, who confirms it should be paid.
Non purchase order invoices also carry more risk. Without an order to match, it is easier for a duplicate, an inflated amount or a fake supplier to slip through, which is why approval rules and audits matter more here.
How do the two compare?
| Parameter | Purchase order invoice | Non purchase order invoice |
|---|---|---|
| Meaning | References an approved purchase order | No purchase order behind it |
| Typical use | Direct purchases and planned services | Indirect, discretionary or urgent purchases |
| Approval | Pre approved through the order | Needs approval after the invoice arrives |
| Processing time | Faster, can match automatically | Slower, needs routing to a person |
| Grouping | Many items on one invoice | Often many separate invoices |
| Transparency | Clear link from request to payment | Harder to trace without good coding |
| Control risk | Lower | Higher, so spot audits matter |
What are the best practices for each workflow?
For purchase order invoices
- Require the purchase order number on every invoice, and reject invoices without it at intake.
- Set clear price and quantity tolerances for automatic approval.
- Record goods receipts promptly so three way matches can complete.
- Route only exceptions to buyers, with the reason shown.
For non purchase order invoices
- Define roles: agree who prepares and who approves non purchase order invoices in each department, and keep the two separate.
- Check before submitting: preparers and approvers confirm each transaction is correct and compliant, and read every warning before submitting.
- Keep the evidence: make sure payments are allowable and accurate, and that the original payment request is kept on file.
- Audit regularly: procurement or finance should spot check non purchase order invoices to confirm items are not on the restricted list.
- Set thresholds: decide which categories and amounts may be bought without an order, and enforce it.
How do you automate both workflows?
Many accounts payable teams still process invoices manually or with basic optical character recognition that needs a lot of correction. Both approaches need many people and make it hard to avoid late fees or capture early payment discounts. Automation handles both invoice types in one flow:
- Capture: AI extracts invoice data from email, portal or scan, and recognizes fields such as invoice number based on past invoices from the same supplier or cost center.
- Classify: the invoice is identified as purchase order or non purchase order.
- Match or route: purchase order invoices are matched to the order and receipt. Non purchase order invoices are routed to the right approver based on your approval hierarchy, cost center and amount.
- Match recurring invoices to contracts: invoices such as a lease or subscription are checked against the payment schedule in the contract and approved automatically when they agree.
- Track: every invoice is visible in the workflow until payment.
On ServiceNow, departments work on the same record, so the approver sees the supplier, the contract and the history. Invoiceflow runs this on ServiceNow and also standalone.
Should you reduce non purchase order invoices?
Faster processing helps, but the bigger gain often comes from having fewer non purchase order invoices. Work with procurement to move recurring spend onto contracts or blanket purchase orders, set up catalogs for common purchases and make it easy to raise an order. Where non purchase order spend is legitimate, such as utilities or rent, match it to contracts instead. See blanket purchase order.
The bottom line
Purchase order invoices can match and approve themselves. Non purchase order invoices need clear roles, rules and audits, and automation that routes them to the right person and matches recurring ones to contracts. Fewer non purchase order invoices is the best result of all.