LPO means Local Purchase Order. It is a document a buyer sends to a supplier to confirm that a purchase has been approved. The buyer issues the LPO before supply, while the supplier issues an invoice to request payment.
An LPO is not proof of payment. It gives the supplier authority to provide the goods or services described in the document, subject to its price, delivery and payment terms.
LPO meaning in simple terms
An LPO tells a supplier:
We have approved this purchase. Supply the listed goods or services at the agreed price and follow these delivery and payment instructions.
LPOs are common when supplying Nigerian companies, banks, schools, hospitals, hotels, government agencies and organisations with procurement departments.
LPO example
| Field | Example |
|---|---|
| Buyer | Adeola Manufacturing Limited |
| Supplier | Bright Office Solutions Limited |
| LPO number | LPO/ADM/2026/0147 |
| Issue date | 12 August 2026 |
| Description | 10 ergonomic office chairs |
| Rate | ₦85,000 each |
| Approved amount | ₦850,000 before VAT |
| Delivery deadline | 19 August 2026 |
| Payment terms | 30 days after accepted delivery and invoice |
Treat this as a simple illustration. Every buyer has its own LPO layout and approval process.
LPO vs invoice
| Question | LPO | Invoice |
|---|---|---|
| Who prepares it? | The buyer | The supplier |
| When is it issued? | Before supply | After supply or at an agreed billing stage |
| What does it do? | Authorises a purchase | Requests payment |
| Does it prove payment? | No | No, unless it is marked paid |
| Which number is used? | The buyer's LPO number | The supplier's invoice number |
The buyer sends the LPO. The supplier sends the invoice. Keep both reference numbers because the accounts team may use them to match the purchase.
What 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, rates and the approved total
- delivery location and deadline
- payment terms
- the name or signature of an authorised officer
Before accepting an LPO, confirm that the company name, scope, amount and delivery terms match the quotation you submitted.
The LPO payment process in Nigeria
- The buyer requests a quotation. The supplier provides prices, specifications and payment terms.
- The buyer approves the purchase. Its procurement team creates and approves an LPO.
- The supplier checks the LPO. Check the buyer, price, quantity, validity, delivery address and payment terms.
- The supplier delivers. Obtain a signed delivery note, job completion certificate or other acceptance evidence.
- The supplier raises an invoice. Quote the LPO number and make the descriptions, quantities and rates match.
- Accounts checks the documents. The buyer may match the LPO, delivery evidence and invoice before approving payment.
- The supplier follows up. Use the due date and payment terms rather than relying on verbal promises.
Public procurement can involve additional steps. The Bureau of Public Procurement provides procurement information and resources for federal contracting. Follow the instructions issued by the particular organisation you are supplying.
Where does the LPO number go on an invoice?
Place the LPO number near the top of the invoice, close to the invoice number and invoice date. Label it LPO Number, Purchase Order Number or PO Reference.
| Invoice field | Example |
|---|---|
| Invoice number | INV-2026-0084 |
| Invoice date | 20 August 2026 |
| LPO number | LPO/ADM/2026/0147 |
| Delivery note | DN-2026-0052 |
Do not use the LPO number as your invoice number. The two documents must retain their separate references.
Invoice example for an LPO
| Description | Quantity | Rate | Amount |
|---|---|---|---|
| Ergonomic office chair, as specified in LPO/ADM/2026/0147 | 10 | ₦85,000 | ₦850,000 |
| Subtotal | ₦850,000 | ||
| VAT at 7.5%, where applicable | ₦63,750 | ||
| Total | ₦913,750 |
If the buyer changes the quantity or specification, request a revised LPO or written variation before issuing an invoice for a different amount.
Documents commonly submitted with an LPO invoice
The buyer may ask for:
- a copy of the approved LPO
- the supplier's invoice
- a signed delivery note
- a job completion or acceptance certificate
- the original quotation
- a customer statement
- tax and CAC details
- a bank confirmation letter
Ask the buyer for its exact invoice-submission checklist. Missing one document can delay an otherwise correct invoice.
Why LPO invoices are delayed
- The LPO number is missing from the invoice.
- The invoice amount or description does not match the LPO.
- Delivery evidence has not been signed or submitted.
- The invoice was sent to the wrong person or department.
- Supplier details do not match the buyer's vendor record.
- The LPO has expired or was not properly approved.
- The supplier changed the bank account without completing verification.
LPO checklist for suppliers
Before supplying, confirm the LPO is genuine, approved and consistent with your quotation. Before invoicing, use your own sequential invoice number, show the LPO number clearly, match the approved lines and submit every supporting document requested by accounts.
Create an invoice with an LPO reference, then read our guides to writing a quotation and choosing an invoice number.