Hi everyone. I have a customer who has placed a few orders with us & now needs to place a larger one (hopefully with some frequency) & asked if I accept purchase orders. Can someone fill me in on how this works. Do I need to invoice them after the purchase order? Any explanation of how these work would be greatly appreciated. Happy holidays everyone!
Basically they are asking for credit if they are an individual i wouldn’t
if they art a church, big business, or school give them a week or 2 to pay the invoice
it does bring in repeat business from these guys
Hi Pizza Maker;
Purchase orders are an official document issued by one company to another indicating what the issuer wishes to buy. It indicates item, quantity, price expected delivery date and any other pertinent information.
Usually the supplier (you) will determine before hand that the buyer has good credit and have informed the buyer as to what your terms of payment will be. If your terms of payment are Ok with the buyer you accept his purchase order, deliver the product, bill the buyer and then the buyer pays your bill in accordance with the terms you have agreed on.
The terms you work out with your buyer can be any thing from C.O.D. to allowing the buyer some time to process your billing and get a check out to you.
Some sellers offer a discount for prompt, 10 days or less payment.
George Mills
You can buy purchase order forms at Staples or local office supply store. Just make sure they’re the kind with the three copies.
Give one copy at time of purchase. Make sure it is signed by receipient, marked with agreed upon terms and that a detailed description of what was purchased and the total cost is written on the ticket.
Mail second copy once agreed upon pay-by-date has past(overdue).
Keep one copy for your records. You might need it to make copies of it for further ‘friendly reminders’.
When dealing with a church, usually a purchase order is just something they draft to show what they spent with church money, and it’s approved by the governing body of the church.
I’ve not had an experience with any purchase orders from churches desiring Net 30 or anything…they usually pay upon receipt, but have the purchase order drafted so they can prove what was bought and why in case it comes to question internally on their side in the future.
It would basically be like me coming in to order 5 pies and giving you a piece of paper saying “PJ girl wants 5 pies from X company for X amount each, delivered on X date, terms of payment are: X”.
This is the opposite of how it works. What you’re describing is an invoice. The pizzeria isn’t going to produce a PO, the purchaser is. The buying company produces a PO and gives it to the supplier. It’s just a document that says “This is exactly what we want, no more, no less.” PO’s are pretty much the only way big businesses buy anything. It eliminates any gray area in the transaction and creates a paper trail of what has been ordered and what has arrived. They also act as a purchasing authorization system where and employee can’t place on order for something until the accounting department has issued a PO number.
A company using a purchase order does not imply in any way that you are extending credit terms. Those two things are completely separate (other than the fact that the terms are usually stated on the PO.) We have business customer that orders by faxing us PO’s; but they don’t have credit terms with us… they have a check ready when we deliver.
In my experience a purchase order is generally used by the accounting department to distribute the charges to the proper department. You can include the purchase order number on the customers invoice or till reciept. If they are requesting credit you should define the terms of the credit prior to making the food.