# PURCHASE ORDER!? Something I don't understand!!!



## LYFE9 (Jul 21, 2010)

Hi !

After reading many threads about PO's and STILL not completely understanding I am starting to feel a little stupid.. Maybe by starting my own thread it can shed some light on my concerns. 

So basically I am in the process of approaching various retail stores to present my new collection. This is the first time I am approaching retail. 

I would like to do everything right and the way the buyers are accustomed to so that I can seem professional and that they don't see doing business with me as being a drag and a headache since I am new. 


SO, from what I have gathered on the other threads is that when it comes time for a shop to place an order, standard practice is using a PURCHASE ORDER form. 

What I DON'T get, is who sends the form to who. If I understand correctly the SHOP SENDS ME THEIR PO. I spoke with another brand owner in my area (who happens to be the manager/buyer at a retail store) and he told me the opposite. He says he ALWAYS sends the shop HIS OWN PO... He also told me that all the good held in store are dealt with in the same manner, that the wholesaler (me) sends their own PO to the shop and they just fill in the blanks. He told me that the different items and price are already listed in the PO and the buyer just fills it in... 

Can someone PLEASE shed some light on this issue. I am getting different answers everywhere I look.


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## LYFE9 (Jul 21, 2010)

If anyone has an example, other than GOOGLE to send me, please DO! 

Also, is the PO always in EXCEL form.

Thank you.


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## binki (Jul 16, 2006)

A PO is a contract by the buyer to purchase goods at a specified price. It is binding so if you get a PO and have an agreed upon price then they are supposed to pay you. Now terms are a different animal. While we accept PO's we don't do anything without a deposit and we get all our money on delivery. For a clothing supplier I would suppose you would get paid when the store feels like paying you, 30-90 days.


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## LYFE9 (Jul 21, 2010)

Thanks for your input, 

I am aware of those things, but will the buyer send me the STORES PO or do I send him MY PO ?


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## dim116 (Nov 27, 2006)

I deal with PO's all the time. Some businesses use them some don't. It is basically a way for the business or organization to keep track of their orders. In my business they always send me the order with their Purchase order number on it. They usually want it referenced on the invoice you send them.
If they will be ordering from you, just ask them if they use Purchase Order numbers or not.
You really don't have to do anything else with it other than referencing it on the invoice. At least that's the way it works here for me.


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## LYFE9 (Jul 21, 2010)

But do I send them MY PO or do they send my THEIR PO. I realize that there may be exceptions to this but what is standard practice. In other threads i've read that they usually send you theirs. Is that what you just explained? 

Maybe in my area things are different.. But I would think there would be standard practice for this sort of thing since they buy from many different companies many times a year and from all over the globe usually..


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## kimura-mma (Jul 26, 2008)

My experience has been similar to Larry's. Businesses use numbered PO's to keep track of orders. The buyer may place the order with a supplier, but a copy of the PO gets submitted to their accounts payable. So the PO acts as a method of tracking orders within an organization and making sure they are paid on time. So if the retail store you are taking orders from use numbered PO's, they will require that their PO's be used. If they do not use numbered PO's, then it really doesn't matter whose you use. At that point, the PO simply acts as a contract (like binki mentioned). As long as the PO includes all pertinent info, you should be ok. It's always a good idea to have the PO singed by both parties. Just make sure the person you are working with has the authority to make purchases.

Oh and in the event that a company uses numbered PO's but the buyer prefers not to use them, be aware. It's a way for a buyer to take in inventory without it being on the company's books. This makes it easy for the buyer to pocket the money sold off the inventory not on record. Yes, I have seen this happen before and it was a buyer for a major professional sports team.


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## kimura-mma (Jul 26, 2008)

LYFE9 said:


> But do I send them MY PO or do they send my THEIR PO. I realize that there may be exceptions to this but what is standard practice.


Ask them if they use PO's. If yes, use theirs. If not, write the order for them and have them sign it. Don't worry about standard practice. Be logical and flexible instead. It will get you farther.


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## LYFE9 (Jul 21, 2010)

Thanks for your input! Very informative. 

I will be asking if they use PO's from now on. 

If they say yes I should wait for them to send me theirs? And if they say no I will send them my PO. 

I am still debating if I should create a PO setup with all my style numbers, colorways, sizes and prices and just have them fill in the blanks. 

OR 

If I should just send them a blank PO and they write what they want to order on it and send it over. The pricing, style numbers and all other info being gathered by them from my linesheet that has already been given. 

OR

If I should ask them to tell me what they want, either in writing, in person or in email. Then create a PO with all that information for them to confirm and send it to them like that. 

What would you suggest? Or should I go more on a case by case basis? Thanks.


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## jfisk3475 (Jan 28, 2011)

They give you a po number. Up to you to keep track

Sent from my SGH-T679 using T-Shirt Forums


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## kimura-mma (Jul 26, 2008)

It's going to be a case by case basis. But whenever possible, YOU should be writing the orders. If you wait for them, you will be waiting forever. Write the order and submit to them to confirm and sign. Think of it as being an independent sales rep. You should be offering them the service of doing the legwork. As long as they pay on time, you should be happy to service them as much as you can.


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## GordonM (May 21, 2012)

Purchase orders: The customer sends these to you.
Proforma invoice: You send to the customer at his or her behest. 

Both do the same thing: they bind the parties to a sales agreement. They include about the same information.

Note again: both are binding agreements. Sales quotes, bids, phone calls, e-mails, chats over drinks -- none of these are binding. You never ship on these.

In the case of a PO, prices and terms must be set before hand, or else the buyer will assume THEIR standard policies. In the case of a proforma invoice, you specify your prices and policies ahead of time. They may generate a purchase order from this, or even a check or COD payment. That's up to the parties involved.

A proforma invoice is not an accounts billable invoice. If you are offering goods on net, your regular invoice will be included with the shipment.


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## Fixico (Dec 3, 2011)

What your friend was talking about sounds like an order form. 
Most businesses that use PO's will send you their PO, as it is the means by which their accounting department keeps track of orders and is in their standard format.
I've found that the most ellegant solution for me is to always send them an order form with my terms clearly listed and with a line for them to enter their PO# (if applicable). Some will still send you their PO, so I just attach a copy of their PO to my order form for my records. It makes it simple, and gets rid of the guess work.


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## LYFE9 (Jul 21, 2010)

Thanks for all the great input! 

I feel somewhat less stupid since this is what I understood about the whole deal until my friend through all that out of whack.. 

I guess the only way to see now is to wait to get some orders. Once that starts happening I will be ready. 

Also, a little off topic but while were here and talking about terms, anyone want to share what their terms are and how they are presented? Are there some useful threads on that topic?

I can share the terms that i've thought of till now if anyone is interested. PM 

THANKS AGAIN! 

Feel free to post any other information regarding the initial topic, any and all info is always greatly appreciated.


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## binki (Jul 16, 2006)

The buyer sends the PO. If someone is buying from you then they send you a PO. If you are buying then you send a PO.


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## ShakeMyHead (Sep 20, 2012)

Keep in mind that an invoice # is different than a PO#. Here is two scenarios where you will deal with PO #'s:
1) When you order t-shirts from your vendor...you call and request 20 blue shirts for design A and 20 shirts for design B. You record this purchase on a form that has your own PO #. You date it and make important notes on it. Such as if anything is on back order, the vendor sales rep who took your order, etc. When you get the invoice from the vendor, it will have their invoice # on it referring to Your purchase order. You can then check the invoice they sent against your purchase order. Make sure everything matches up. If it does not, you have the vendor's rep recorded and have a better chance at credits, no charge replacements, etc.
2) When a customer sends you a PO, it works opposite as above. You prepare an invoice of your very own, with your company invoice number. You reference their PO number. When they get your bill, they will double check you sent them what they ordered. 
Basically it is the way to CYA. If a customer doesn't use purchase orders, it is a good idea to send an "acknowledgement". This can be your company invoice sent via fax or email and you only proceed with the order when they "acknowledge" in a reply that it is correct. If they reply by phone, make sure you note the time, persons name, etc. CYA CYA CYA makes a happy you!


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