Contractors' Questions: Can I submit an invoice without a PO number?
Contractor’s Question: I have a client who I have supplied for a long time but they suddenly said I must provide a Purchase Order number for every piece of work I invoice them for. To date, the various account handlers have been providing a PO number during each project.
But there is one account handler who is ignoring my emails where I request the PO number. The project took several days and completed weeks ago, but I haven't billed for it, as I've been told I must have the PO number.
Why are PO numbers being insisted on all of a sudden? I have flagged up the problem with the missing PO to a manager (the person I send my invoices to), but nothing has happened. Do you think my invoices are at risk of not getting paid?
And where do I stand legally? Surely if the work has been done and accepted they have to pay for it, whether a PO number is included or not? So am I right to think I should carry on invoicing, regardless?
Expert’s Answer: There is nothing to stop you invoicing as normal whether you have a PO number or not. In fact, we would recommend that you do send the invoice, so the clock starts ticking on the payment window for the work you have completed.
In our view, an invoice remains payable irrespective of whether it includes a PO or not, provided it has been submitted using the right channels and you can prove that the work was completed.
Not an end of the world scenario
We regularly take on payment issues that stem from whether the invoice follows the correct format. While it is always preferable to have the PO at the point when the work is requested, it isn't the end of the world to not have one. We have previously been successful in pursuing unpaid invoices that did not have a PO through the courts, which indicates that the law is on your side.
In your particular case, and when faced with someone not supplying a PO in general, our advice would be to submit the invoice in the usual fashion but copy in the errant account handler, simply stating that ‘person X’ is responsible for providing the missing PO. This puts the onus back on the client to sort out whatever internal issues are preventing the PO being generated. And as we have already suggested, by sending the invoice, the client then knows that payment is due and they have a fixed window to process the payment.
Client considerations (and motivations)
As to why the client has suddenly started insisting on POs, this could be for any number of reasons. You can think of a PO as almost like a reverse invoice. Using POs ties every invoice that is paid to internal records. Wanting better control and oversight of budgets is a common reason why companies use POs (including during the ongoing covid-19 pandemic), as is streamlining payment authorisations and ensuring that all invoices submitted are genuine.
So to sum up - yes, continue to submit invoices as normal even if a PO isn't submitted. Make sure you keep careful notes of who requested what works and when. If a request for a PO goes unheeded, you can pass the buck back to them when you send your invoice, but you should also have ample evidence to prove that your invoices are legitimate if push comes to shove. Good luck!
The expert was Adam Home of Safe Collections Ltd, a debt recovery firm specialising in recovering unpaid invoices for contractors.