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I'm barely making ends meet and I can't afford a large loss. How safe would you consider this to be?
Shortly I'll also verify the legitimacy of this purchase by calling the main school phone number and speaking with the principal.
Any other ideas or advice you can offer?
Thank you!
[edited by: fakeDecoy at 6:25 pm (utc) on May 20, 2008]
[edited by: lorax at 10:55 pm (utc) on May 20, 2008]
[edit reason] widgetized [/edit]
Yes, call the administration by going thru a listed phone number and not one offered by the buyer. We sell to a lot of private trade schools. Some do fail. And some aren't quick to pay bills.
Get a PO number to assure that the buyer was authorized to make such a large purchase. Believe me, their Accounts Payable Dept won't cut you a $5,000 check without a PO.
Make sure the terms are reproduced within the PO you receive and reject it if they are not. The PO is solid documentary evidence of what was agreed. Be wary of any 'clauses' on the PO which mean they need to get a certain person or body to inspect or accept goods (often taking months before this person visits).
Whether you actually borrow the money or not is not important - at least you will be in eventual receipt of sufficient funds to cover borrowing if you need to do so.
Apart from the cashflow issue of late payment there is also the issue of the extra work involved. One single $5000 invoice is obviously worth it in that sense, but if you start getting loads of $50 orders on purchase order you have a job of work to do keeping track of them, calling late payers etc.
We very very rarely accept purchase orders - costs us some business, but the market we are in means we can afford this for the benefit of keeping life simple and the money in our bank account where it belongs. If we did accept POs a lot of our cash buyers would probably take that option, so its swings and roundabouts. We're also in the UK where late payment on invoices seems to be pretty much endemic.
I do have to admit I rather enjoy telling someone who trys to use a PO for some cheap item how we work. "You pay us money, we send you products. In that order." ;)
For some organisations it seems to be more a paperwork thing than anything else, plenty of times I've offered to send a Proforma Invoice to someone who wants to buy on account so they can use this with their accounts dept to raise payment before the goods are shipped, and this is often accepted.
"You pay us money, we send you products. In that order." ;)
Jeesh!
Yes, and they say "you send us an impeccable audited credit report and proof youve been in business at least 10 years before we send you $5,000 in cash.
We're thrilled to take POs from most schools. Wish we had more. Theyre good repeat customers.
before we send you $5,000 in cash.
We sell high value low margin goods, the vast majority to small businesses/freelancers/individuals, so no account purchasing works well for us, but definitely not applicable to all businesses I realise.
The time when banks wouldn't issue VISA or Mastercard to business customers are long long gone. Any large outfit should be able to obtain one and use it for purchasing.
I have a "business" credit card that I use exclusively for business. Had it for many years. The bill goes to our office, not my home, and is paid by our bookkeeper. But it's really a personal card in that I'm personally liable for the debt if our corporation would fail. How easy is it to get a business card without personal liability these days? We're not a "large outfit."
Seems like every few months I hear of another misuse of government/military credit cards. Schools could also give out stacks of cash for purchasing purposes, but that wouldn't be smart. POs are usually binding contracts, sometimes requiring multiple signatures over a certain amount, that protect the seller too.
Bring 'em on!
The time when banks wouldn't issue VISA or Mastercard to business customers are long long gone. Any large outfit should be able to obtain one and use it for purchasing.
Government agencies very rarely will pay with a credit card, whether they "should" or not.
Purchase orders from schools are fairly low risk.
If you make the deal make sure you a agree on a fixed term of payment in advance, perhaps offer a discount for quick payment and don't hesitate to send reminders if the payment is overdue.
The time when banks wouldn't issue VISA or Mastercard to business customers are long long gone
I am always happy to invoice local government departments but they can be slow to pay. The biggest risk is that the purchaser does not have authority for that amount of spend which could substantially delay payment.
Government agencies very rarely will pay with a credit card, whether they "should" or not.
We get orders every single day from government agencies in the USA and Canada. Almost all of them with a credit card. The US military issues credit cards to all their purhasing departments and at the unit level too. We have taken credit card orders from submarines under the ocean, aircaft carriers out to sea, from various war zones... etc. Plus many school boards too. We are noticing fewer and fewer PO's from government agencies.
But if they want use a PO, we always insist on a faxed PO, then we verify by the internet and/or a phone call.
[edited by: Rugles at 6:35 pm (utc) on May 22, 2008]
