In accounts payable, what is a Non PO invoice and how is it generally used in organisations?

Introduction / Context:
Invoice processing is a core part of the accounts payable function. Interviewers often ask candidates to explain the difference between PO invoices and Non PO invoices. This question checks whether you understand how Non PO invoices fit into the overall control framework for vendor payments.

Given Data / Assumptions:
- The focus is on vendor invoices received by an organisation for goods or services.
- Some invoices are clearly linked to purchase orders while others are not.
- The question asks specifically about Non PO invoices, which means invoices without a purchase order reference.

Concept / Approach:
A PO invoice is tied to a purchase order and often to a goods receipt or service entry, enabling a three way match. A Non PO invoice does not have such a purchase order reference. It is commonly used for recurring or low risk expenses such as rent, utilities, telephone bills, subscriptions, or some professional services where a formal purchase order may not have been raised. Because there is no PO, Non PO invoices rely more on approval workflows and coding controls before posting and payment.

Step-by-Step Solution:
Step 1: Recognise that PO stands for purchase order and that a PO invoice is matched to an existing order document.
Step 2: Understand that a Non PO invoice, by definition, is an invoice processed without a matching purchase order.
Step 3: Recall common examples such as office rent, monthly electricity bills, internet charges or audit fees, where companies often process invoices directly as Non PO items.
Step 4: Note that for such invoices, AP teams rely on cost centre, general ledger coding and approval hierarchies to control spending before payment.

Verification / Alternative check:
If an invoice can be matched against a PO and goods receipt, it is not a Non PO invoice. If it arrives with no PO reference and is posted based on approval by responsible managers, it falls into the Non PO category. This simple decision rule helps you classify invoices correctly.

Why Other Options Are Wrong:
Option A is the exact opposite of the definition of a Non PO invoice. Option C describes the status of an invoice that has been paid, which has nothing to do with whether it is PO or Non PO. Option D suggests an internal invoice between departments, which relates more to internal cost allocation than to vendor payable invoices.

Common Pitfalls:
Sometimes learners think Non PO invoices are informal or not controlled, but in a good AP process they are still subject to strong approval checks. Another mistake is to assume that all service invoices are Non PO. In many organisations, large service contracts do have purchase orders and are processed as PO invoices. The key is the presence or absence of a purchase order reference, not whether the item is a good or a service.

Final Answer:
Correct option: A vendor invoice that does not reference a purchase order and is usually used for expenses such as rent, utilities and professional services.