Forums: Discussions for entrepreneurs and small business.

I have a compnay who wants to know if they can pay for purchases from my website with a purchase order and then be billed.  Can someone please explain what that means and whether or not that is a good thing to do.  We do service quite a few corporations.  Is this a service that I should offer?  Not necessary?  Is this so that an individual does not have to buy a product and then submit for reimbursement?  Do I ship the item and then bill for it?  Thanks!

P.S. I sell sympathy gifts online.  We get this question frequently from businesses.

It is your call.  It is risky even with big companies.  It is not necessary.  It really depends on how much you have to lose, if they don`t pay, and how much you have to gain, if they pay as promised.  You can always give them terms after they pre-pay the first order, if you think it will give you multiple future sales.  I would not do it otherwise.  Most would not expect it.  You could always offer to send them an invoice and then ship when it is paid.  This would allow a big company to get required paper work done so you get paid.

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Maybe I was a little too fast with my response.  For most speciality retail businesses my response would be correct.  But, I visited your web site and I would be surprised if you had very many difficulties in getting paid.  Companies you sell to may be late but I think 99% will eventually pay you.  One thing I would do is to be careful who you extended terms to.  I would not extend them to individuals.  Make sure you can verify their credit and their company information.  I would not offer a 30 day money back guarantee when terms are given.  Once again it is up to you.

 

By the way, you have a very nice web site even though you went to FSU…

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Anyone know how hard it is to run a credit check on a corporation, and how much it would cost?

My thinking is that if it`s inexpensive and simple, run the check then accept the PO based on that. Maybe?

With the Internet today you can do a simple search that won’t cost anything but a little time.  Google search the company and see what comes up.  Look for things like legal problems and ways to verify they are for real.  Many bankruptcy filings will show up with a simple Google search.  Look for things that indicate years in business, current news and company size.  Then verify the phone number and the location with one of the many on-line phone book sites.  Just simple things like this will give you an overall feeling if you should extend them credit.  There is nothing that will be fool proof, even if you pay for a credit check.  But if a free search turns up nothing, bad or conflicting information, it is time to ask for cash up front.  I think this would work for this thread because the product being sold will make people feel guilty if they don’t pay for it.  It is a little different that many others. 

 

I will admit that nothing is guaranteed in today’s government messed up business environment.  The influx of foreign business people in the US is changing what we considered ethical behavior in years past.  This why I think Renee will ultimately need to make the decision.

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Thank you for the insight.  I just don`t feel like I have the time to invoice, wait on payment, keep track of everything, etc.  I hate to not be able to provide a service to these businesses, but unfortunately I`m one of those business people who is still working In their business and not on their business. 

Right now I am just keeping up with the orders that come in prepaid.  I just don`t think I can afford to lose the time this would take me.  I offered to invoice them and accept a corporate check.

 

PS.  I got my undergraduate degree at U of F (GO GATORS!)  Does that help

Sounds like you are doing the right thing.  I would stick with it.

All I can say is, least they are FL schools...

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

So basically you`re turning away business. Do you think that`s a good strategy?

This may be true, but just saying no to offering credit is not necessarily turning down business.  This is espectially true if you can come to an alternate solution that makes all parties happy.

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

I know this reply is very late, but I wanted to throw in my 2 cents in case someone else stumbles across this as I did.  I recently stopped accepting purchase orders for my small business because I`m tired of losing money with late/non-payers.  The customers I lose are usually ones with no credit and no company credit card.  If someone needs an invoice, I send it.  The order is shipped after I receive payment.  I`m not a bank, therefore I shouldn`t have to loan money.