Is a purchase order legally required on an invoice?

No. A PO is a client control, not a VAT requirement. Notice 700 lists what a VAT invoice must show, such as the invoice number, tax point, parties, description, rate and totals. Whether you must quote a PO comes from your contract and the client's payment process, so write it into your terms or assignment schedule.

Should a PO be per placement or per invoice?

Ask the client. A PO per placement is common for contractors and covers the whole assignment up to a value and date limit. A PO per invoice is common for perm fees. A blanket PO sits across a supplier. Record the pattern against the client so the whole desk knows.

What do I do when a PO runs out mid-contract?

Ask for a new PO or an uplift before the next invoice, not after it is rejected. Check the PO value and end date whenever a contract is extended, and ask whether the PO value includes VAT. Keep approving timesheets, but flag the exposure to your director.

Can I invoice without a PO and hope for the best?

You can send it, but a client with a no PO, no pay rule will reject it, and your payment terms may not start until a valid invoice arrives. The contractor is still paid weekly. It is safer to hold the invoice, get the number, and send it once, correct.

What if the client says they do not use POs?

Get that in writing. Ask what reference to quote instead, such as a cost centre or project code, and who receives invoices. Some clients without POs still need an approving email from the hiring manager. Knowing the process on day one is the difference between a rejected invoice and a paid one.

Answers

Why do clients insist on purchase order numbers, and how should an agency handle them?

Clients insist on purchase order numbers because their accounts payable team pays only what procurement has approved, and the PO is the proof. An invoice with no valid PO, or one that has run out, is rejected before anyone asks whether the work was done. The fix is to capture the PO, its value and its end date when the placement is confirmed, check it at every extension and quote it on every invoice. An agency that treats it as an invoicing detail will find out through late cash.

Written by the Vayora team. Updated 28 October 2026.

A purchase order is the client's internal permission to spend. Someone in the client has approved a budget for your contractor or your fee, procurement has raised a number against it, and accounts payable will pay invoices that quote it. Without the number, there is nothing to match. The invoice is not wrong. It is unauthorised, as far as the client's system is concerned.

That is why a contractor who has done five good days can still go unpaid by the client for weeks. The PO is a client control, not a legal requirement of VAT or of your contract, and it is enforced by software that does not read emails. The glossary entry for a purchase order number gives the short version. This page is the long one.

None of this is difficult. It is dull, and dull things get skipped. The agencies that never chase POs are the ones that recorded the number on day one.

Why do accounts payable teams reject invoices without a PO?

Because their job is to pay only what was approved. In many mid-sized and large clients, the rule is no PO, no pay. The invoice is matched to a PO, and often to a record that the work was received, which for a contract is the approved timesheet. If the match fails, it goes back to the sender or into an exceptions queue.

Nobody in that queue is deciding whether you are owed the money. They are checking that a number exists, that it is still open, that it has enough value left, and that it belongs to the right supplier and cost centre. That is why a polite reminder to the hiring manager so often achieves nothing. The hiring manager is not the one holding the block.

The PO is a client requirement, not a VAT requirement. The contents Notice 700 lists for a VAT invoice in paragraph 16.3.1 concern the invoice number, the tax point, the parties, the description, the rate and the totals. Your terms of business and your assignment schedule are where the PO obligation really lives, so write it in. Clients on a preferred supplier list are the most likely to enforce the rule strictly, because their procurement team set up the supplier record and expects the PO on every invoice. Ask for the PO process in the first call, before the candidate is submitted, so that the answer can shape the rate and the terms you quote.

Which PO patterns do clients use?

Clients differ, and the right capture at placement depends on the pattern. Ask on the first call which one this client uses, and write the answer on the placement.

PO pattern	When it suits	Risk	What to capture at placement
One PO per placement	A single contractor or a perm fee, common in mid-sized clients	Runs out at extension or on overtime	PO number, value, start and end dates, VAT basis
One PO per invoice	Perm fees and one-off milestones	A new PO must be raised before each invoice, so the first one stalls	How and when the client will raise it, and who raises it
Blanket PO for the supplier	Frameworks and preferred supplier lists	Shared pot; a draw-down reference is also needed	Blanket number, the call-off or draw-down reference, the value remaining
PO per contractor in a team	Several contractors at one client	One invoice covering three contractors fails against three POs	Which PO each contractor sits under, and whether invoices must be split
No PO, but a cost centre or reference	Smaller clients and some public bodies	Invoice rejected for a missing reference even without a PO	The reference to quote, in writing, and the billing contact

How do PO value limits and extensions catch agencies out?

A contract PO usually has a value limit, a date limit or both. It is sized when the contract starts and it does not know the contract will be extended.

A worked example. A contractor is placed at a £550 day rate for 26 weeks, which is 130 days. That is £71,500 before VAT and £85,800 with 20 per cent VAT. The client raises a PO for £85,800. The contract is extended by 13 weeks at the same rate: another 65 days, £35,750 or £42,900 with VAT. Nobody asks for a new PO. The first invoice of the extension is rejected by the system, because there is nothing left to match it to.

Check also whether the PO value is net or gross of VAT. A PO sized at the net contract value and matched against invoices that include VAT runs out a sixth of the way early. Ask which basis the client uses when you capture the number.

The extension is the moment to catch it. The extension conversation and the PO conversation are the same conversation, and the contract extension page puts both in one sequence.

What should you capture about the PO at placement?

Record it as part of the placement, not as a field on the first invoice. If the number lives in an email to one consultant, it will be absent the week they are on holiday.

The PO number exactly as the client wrote it.
Its value and whether that includes VAT.
Its start and end dates.
Which contractor or contractors it covers, and the cost centre.
The named accounts payable or billing contact, and the mailbox invoices must go to.
How the client raises a replacement, and how long that normally takes.

What if the client has no PO process?

Some smaller clients do not issue POs at all. Do not leave it unsaid. Ask for written confirmation, in an email or in the assignment schedule, that no PO is required. Ask which reference to quote instead, such as a cost centre or project code, and who in the client receives invoices.

Then check what the client does when an invoice arrives. Some clients with no PO process still require the hiring manager to approve each invoice by email. That is a step you can plan around if you know about it on day one.

What does a missing PO do to cash, and what does a chase look like?

Take a contractor on a £450 day rate, 5 days a week, paid weekly: £2,250 a week out of the agency. If the first invoice is rejected for a missing PO and a valid PO takes three weeks to arrive, then payment terms of 30 days start, the agency funds about seven pay runs before the first payment arrives: roughly £15,750 for one contractor. Across several contractors, a missing PO is a credit problem.

A chase should be quick, specific and aimed at the right person. The aim is to get a valid PO number on the record, not to argue about the invoice.

Day one: ask the hiring manager for the PO number in writing, and copy the named accounts payable contact.
Day three: ask accounts payable what they need, and whether the PO exists but has not reached you.
Day five: escalate to the hiring manager's manager, with the invoice, the timesheet and the dates.
Day ten: raise the exposure with your own director, and decide whether to pause new timesheet approvals for that client.
Throughout: re-send the invoice only when the PO is confirmed, quoting the PO number and the original invoice number.

What about credit notes and POs?

A credit note should reference the same PO as the original invoice, so that the client's system can net the two. A credit note without the PO tends to sit unmatched. The credit notes page covers what else the client's team expects.

Where Vayora fits

Vayora holds a PO number on an invoice. When you raise an ad hoc invoice, such as a perm fee, there is an optional PO number field, and the number is printed on the PDF as "Your purchase order reference" and shown in the invoice detail. Invoices go to the client's billing contact where one is set, rather than the hiring manager.

Where it stops, and this matters for PO-driven contract clients. A PO is held on the invoice, not on the placement. Invoices raised automatically from approved contract timesheets do not pick up a PO from the placement, so for those you add the reference yourself. There is no PO value or end date on the placement, so Vayora will not warn you that a PO is nearly spent. A credit note does not carry the PO either. Until that changes, keep the PO, its value and its end date in the placement notes, and check them when the contract-ending task fires.

That task is the useful part. Vayora creates a task for the owner of a contract placement once it is inside 30 days of its end date, which is your cue to talk to the client about both the extension and the PO. To see where it sits on the desk, start a free trial, or read about contract finance.

Common questions

Is a purchase order legally required on an invoice?: No. A PO is a client control, not a VAT requirement. Notice 700 lists what a VAT invoice must show, such as the invoice number, tax point, parties, description, rate and totals. Whether you must quote a PO comes from your contract and the client's payment process, so write it into your terms or assignment schedule.
Should a PO be per placement or per invoice?: Ask the client. A PO per placement is common for contractors and covers the whole assignment up to a value and date limit. A PO per invoice is common for perm fees. A blanket PO sits across a supplier. Record the pattern against the client so the whole desk knows.
What do I do when a PO runs out mid-contract?: Ask for a new PO or an uplift before the next invoice, not after it is rejected. Check the PO value and end date whenever a contract is extended, and ask whether the PO value includes VAT. Keep approving timesheets, but flag the exposure to your director.
Can I invoice without a PO and hope for the best?: You can send it, but a client with a no PO, no pay rule will reject it, and your payment terms may not start until a valid invoice arrives. The contractor is still paid weekly. It is safer to hold the invoice, get the number, and send it once, correct.
What if the client says they do not use POs?: Get that in writing. Ask what reference to quote instead, such as a cost centre or project code, and who receives invoices. Some clients without POs still need an approving email from the hiring manager. Knowing the process on day one is the difference between a rejected invoice and a paid one.

Sources

Checked 28 October 2026

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