An LPO is a Local Purchase Order. It is a document a buyer sends to a supplier to confirm that a purchase has been approved.
If a company sends you an LPO, it is giving you permission to supply the goods or services listed in the document. The LPO is not an invoice and it does not mean you have been paid. You normally send your invoice after you have supplied what was ordered, following the buyer's process.
LPO meaning in simple terms
An LPO is an instruction from the buyer that says:
We approve this purchase. Please supply the listed items at the agreed price and under the stated terms.
LPOs are common when dealing with Nigerian banks, schools, hospitals, large companies, government agencies and businesses with formal procurement teams.
LPO vs invoice
| Question | LPO | Invoice |
|---|---|---|
| Who prepares it? | The buyer | The supplier |
| When is it issued? | Before supply | Usually after supply or at an agreed billing stage |
| What does it do? | Authorises the purchase | Requests payment |
| Does it prove payment? | No | No, unless it is marked paid |
| Which reference matters? | The buyer's LPO number | The supplier's invoice number |
The simplest way to remember the difference is this: the buyer sends the LPO and the supplier sends the invoice.
What information should an LPO contain?
A useful LPO normally shows:
- the buyer's name and address
- the supplier's name and address
- a unique LPO number
- the issue date and any expiry date
- a clear description of the goods or services
- quantities, prices and the approved total
- delivery location and deadline
- payment terms
- the name or signature of an authorised officer
Do not begin expensive work until you have checked that the company name, price, scope and delivery terms match what you agreed.
The usual LPO to payment process
- The buyer asks for a quotation.
- You send a quotation or pro forma invoice.
- The buyer approves the purchase and sends an LPO.
- You check the LPO before supplying anything.
- You deliver the goods or complete the agreed service.
- You send an invoice that quotes the LPO number.
- The buyer matches the LPO, delivery evidence and invoice before processing payment.
Public procurement can involve additional approvals and documents. The Bureau of Public Procurement publishes standard bidding documents and procurement guidance for federal procurement. Always follow the instructions given by the particular organisation you are supplying.
Where should the LPO number go on an invoice?
Place the LPO number near the top of your invoice where the accounts team can see it quickly. You can label it as LPO Number, Purchase Order Number or PO Reference.
Example:
| Field | Example |
|---|---|
| Invoice number | INV-2026-0084 |
| Invoice date | 20 July 2026 |
| LPO number | LPO/LAG/2026/0147 |
| Delivery note | DN-2026-0052 |
You can also repeat the LPO number in the notes section. Do not use the LPO number as your own invoice number. The two documents need separate references.
Example of an invoice raised against an LPO
Assume a client issues an LPO for 10 office chairs at ₦85,000 each.
| Description | Quantity | Rate | Amount |
|---|---|---|---|
| Ergonomic office chair, as specified in LPO/LAG/2026/0147 | 10 | ₦85,000 | ₦850,000 |
| Subtotal | ₦850,000 | ||
| VAT at 7.5%, where applicable | ₦63,750 | ||
| Total | ₦913,750 |
The product description, quantity and rate should match the LPO. If the buyer changes the order, ask for a revised LPO or written variation before issuing a different invoice.
Common reasons LPO invoices are delayed
- The LPO number is missing from the invoice.
- The invoice amount does not match the approved amount.
- The description on the invoice is different from the LPO.
- Delivery evidence has not been submitted.
- The invoice was sent to the wrong person or department.
- The supplier's business name or bank details do not match the vendor record.
- The LPO has expired or has not been properly approved.
Before sending your invoice, ask the buyer exactly which documents the accounts team needs. This may include the LPO, delivery note, job completion certificate, tax details and bank confirmation letter.
LPO checklist for suppliers
Before you supply:
- confirm the LPO is genuine and approved
- check the price, quantity and scope
- confirm who can approve changes
- understand the payment timeline
- keep all delivery evidence
Before you invoice:
- use your own unique invoice number
- show the LPO number clearly
- copy the descriptions and quantities accurately
- show VAT separately where it applies
- include the correct bank and business details
- send the invoice to the correct accounts contact
You can create a professional invoice online and add the LPO number in the reference or notes field. You may also find our guides to writing a quotation and numbering invoices useful.