The Procurement Glossary » No PO, No Pay
No PO, No Pay
Procure-to-Pay
Definition
A policy that suppliers will not be paid unless a valid purchase order was raised before the goods or services were delivered.
Explanation
No-PO-no-pay enforces up-front commitment control and clean matching. It sharply reduces non-PO invoices and maverick spend, though it requires good catalog coverage and user discipline so legitimate buying isn't blocked.
Example
After adopting no-PO-no-pay, the share of matchable invoices rose from 60% to 95%.
Related terms
- Non-PO Invoice — A supplier invoice received without a matching purchase order, common for utilities, rent and ad-hoc services.
- Purchase Order (PO) — A buyer's official document authorising a purchase from a supplier, stating items, quantities, prices and terms; once accepted it forms a contract.
- Maverick Spend — Purchasing done outside agreed processes, contracts or preferred suppliers — 'off-contract' buying.
- Contract Compliance — The extent to which actual buying follows the prices, terms and preferred suppliers set in contracts.
Frequently Asked Questions
What is No PO, No Pay?
A policy that suppliers will not be paid unless a valid purchase order was raised before the goods or services were delivered. No-PO-no-pay enforces up-front commitment control and clean matching. It sharply reduces non-PO invoices and maverick spend, though it requires good catalog coverage and user discipline so legitimate buying isn't blocked.
Can you give an example of No PO, No Pay?
After adopting no-PO-no-pay, the share of matchable invoices rose from 60% to 95%.
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