The short version
A clean purchasing workflow keeps three records separate until they have been reconciled:
Order → receive → bill → reconcile
Purchase order: what the merchant agreed or expected to buy. Physical receipt or linked inventory transfer: what actually arrived and was accepted. Supplier invoice: what the supplier billed. Compare all three before inventory quantity or product cost is treated as final.
This matters because real supplier deliveries are messy. One shipment can be short, split across several days, invoiced at a different price, packed by the carton instead of the unit, or substituted with another product. The records are related, but they are not interchangeable.
The three records solve different problems
1. Purchase order: what you agreed or expected to buy
A purchase order is the commercial plan. It normally records the supplier, products, expected quantities, expected prices, payment terms and destination. It is useful before the goods arrive because it tells your team what should be coming and on what terms.
But a purchase order is still an expectation. It does not prove that 48 units arrived just because 48 units were ordered.
2. Receiving or linked inventory transfer: what physically arrived
The receiving record is operational truth. It answers questions such as: how many units arrived, how many were accepted, what was rejected as damaged, and what remains outstanding. In Shopify, a purchase order can be linked to an inventory transfer so the commercial agreement and the physical movement remain separate records.
For a detailed receiving routine, use the Shopify inventory receiving checklist.
3. Supplier invoice: what the supplier billed
The supplier invoice is the billing record. It tells you what the supplier expects to be paid for: billed products, quantities, prices, discounts, taxes, freight or other charges. It can also contain the most recent supplier price for a product.
The invoice is essential for cost review, but it still does not prove that every billed unit physically arrived. Our guide to supplier invoice processing for Shopify covers the invoice-to-product workflow in more detail.
Purchase Order vs Physical Receipt vs Supplier Invoice
| Record | What it represents | Typical quantity | Typical cost | What it should control |
|---|---|---|---|---|
| Purchase Order | What you agreed or expected to buy | Ordered quantity | Agreed or expected supplier price | Purchasing expectation and supplier commitment |
| Physical Receipt / Linked Inventory Transfer | What physically arrived and was accepted | Accepted, rejected, canceled and outstanding quantity | Receiving-side adjustments where relevant | Inventory movement and available stock |
| Supplier Invoice | What the supplier billed | Billed quantity | Invoiced price, discounts, tax and other charges | Accounts-payable review and candidate product cost |
If all three match, processing is simple. When they differ, the difference is not noise to ignore; it is the exception your team needs to resolve.
Why reconciliation matters before quantity or cost is final
Imagine a purchase order for 10 cartons of 12 units at $24 per carton. The warehouse receives 9 cartons, one of which contains two damaged units. The supplier invoices all 10 cartons at $25 each.
- The PO says you expected 120 units at an effective $2.00 each.
- The physical receipt says 106 usable units were accepted.
- The invoice says you were billed 120 units at an effective $2.08 each.
None of those numbers should silently replace the others. Inventory should reflect accepted stock. Product cost should be based on the cost policy you actually approve. The commercial difference should be resolved with the supplier rather than hidden inside a Shopify update.
If your main concern is product cost, see how to update Shopify Cost per item from supplier invoices.
Practical reconciliation examples
| Scenario | What can differ | Practical response |
|---|---|---|
| Partial delivery | PO says 100; first shipment contains 60 | Receive 60 now, keep 40 outstanding, and do not make 100 units available just because the PO exists. |
| Supplier price change | PO says $8.00; invoice says $8.40 | Confirm whether the higher price was agreed before changing Shopify product cost or approving the invoice. |
| Carton / case vs individual units | Invoice bills 5 cases; Shopify stocks 60 individual units | Normalize the pack size before comparing quantity or cost. Five cases of 12 must become 60 eaches, and case price must become unit cost. |
| Shortage | Supplier billed 50; only 47 arrived | Receive 47, record the shortage, and resolve the remaining three units through redelivery, credit or invoice correction. |
| Damaged goods | 50 arrived; 4 are unusable | Separate accepted and rejected quantity. Do not increase sellable stock by units your team cannot actually sell. |
| Substitution | PO requested SKU A; supplier sent SKU B | Match the received and invoiced item to the correct Shopify product. Do not force the substitute into the original SKU just to make the PO balance. |
| Backorder | PO remains 100; supplier ships 70 now and 30 later | Keep the outstanding quantity visible and reconcile each shipment or invoice without closing the commercial expectation prematurely. |
A practical three-way reconciliation workflow
- Confirm the purchase order. Capture the supplier, ordered SKU, expected quantity, pack size, agreed price, currency and destination.
- Receive what physically arrives. Use the linked inventory transfer or your receiving process to record accepted, rejected, canceled and still-outstanding quantities.
- Capture the supplier invoice separately. Extract the invoice number, billed quantity, unit price, discounts, tax and any freight or adjustments.
- Normalize before comparing. Convert cartons to individual units, standardize units of measure, confirm currency and make sure each supplier line maps to the correct Shopify variant.
- Compare PO vs receipt vs invoice line by line. Flag quantity, product and price differences instead of hiding them in totals.
- Resolve exceptions. Confirm substitutions, backorders, shortages, damages and supplier price changes. Ask for corrected documents or credits when needed.
- Finalize inventory and cost independently. Inventory quantity should reflect accepted stock. Product cost should reflect your approved costing policy, not simply the last number OCR found on an invoice.
- Keep the evidence. Preserve the PO, receiving record, supplier invoice and the approved changes so the decision can be explained later.
How this fits Shopify
Shopify now separates these concepts in the admin: purchase orders can record supplier agreements, while a linked inventory transfer can track shipments and receiving. That separation is useful because receiving, partial receipts and outstanding quantities belong to the physical movement record rather than the purchase order itself.
The supplier invoice remains a separate document that needs its own review. Shopify can tell you what you ordered and received; your invoice workflow still needs to establish what you were billed and whether that billing should change product cost.
Merchants moving away from Stocky should keep this distinction in mind. The Shopify Stocky shutdown migration checklist covers the broader operational transition.
Where Salor Invoice fits
Salor Invoice is focused on the supplier-invoice side of this workflow: extracting supplier invoices, matching invoice lines to Shopify products, reviewing receiving and quantity information, and helping merchants review product-cost changes before approved updates are applied.
What Salor Invoice is not
- It is not a purchase-order management system.
- It is not a Stocky replacement.
- It is not a warehouse management system (WMS).
- It is not a forecasting system.
The useful boundary is simple: keep purchase-order planning where it belongs, keep receiving tied to physical stock movement, and use the supplier invoice as a reviewed source for billing, quantity exceptions and product-cost decisions.
Explore Salor InvoiceFrequently asked questions
Are a purchase order and a supplier invoice the same thing?
No. A purchase order records what you agreed or expected to buy. A supplier invoice records what the supplier billed. They can match perfectly, but they can also differ because of partial shipments, substitutions, price changes, shortages or billing errors.
Should Shopify inventory be updated from the purchase order or the supplier invoice?
Inventory quantity should reflect what was physically received and accepted, not simply what was ordered or billed. The purchase order is the expectation, the receiving record is the physical truth, and the supplier invoice is the billing record. Reconcile all three before treating quantity or cost as final.
What if the supplier invoice price is different from the purchase order?
Treat the difference as an exception. Confirm whether the new price was agreed, whether the invoice is wrong, or whether a credit note or adjustment is expected. Do not silently overwrite Shopify product cost just because the latest invoice contains a different number.
Does Salor Invoice replace purchase-order software, Stocky or a WMS?
No. Salor Invoice focuses on supplier-invoice, receiving, quantity and product-cost workflows. It is not a purchase-order management system, a Stocky replacement, a warehouse management system or a forecasting system.