What is a purchase order?

Hey!

I've been running a moderately successful e-commerce site for some time now. Today I had a college e-mail me wishing to make a large order via purchase order. I really have no knowledge of purchase orders at all!

I currently use paypal as a credit card processor. I'm assuming purchase orders involve you shipping the product and then waiting on the customer to pay (30 days is customary correct?) How does the customer pay at the end of this time period?

Any insite you can give me into this would be great! I don't want to turn off this customer by my lack of experience with these kind of orders.

Thanks!

Purchase orders are used when organizations buy things, usually under contract. You would most likely be paid by check. I'd be careful. Get a phone number and verify that you are really dealing with the college and get straight on payment terms, etc.

Definitely verify everything. I would look up the college's number online, call that & ask to speak to the person. That way you can feel better that it is the college and not just some student, etc.

As far as payment due - some say 10 and some 15. It all depends on your terms of service.

Purchase orders are pretty standard when dealing with government entities, such as school systems. It is essentially a contract stating that payment will be made after the product has arrived. After the product has been received by the entity that orders it, just shoot them over a paypal invoice if that is what you use...terms of purchase orders usually are 30 days. The PO should have the company's (schools) tax ID number on it, a place to deliver, a signature authorizing the purchase, the date, and description of the product being ordered. Also, the previous poster was correct, you will most likely get paid by check.

Definately usually paid by check. Also, although the terms widely used are Net 30, you can also add in a discount of x% if they pay by Net 15. This will (sometimes) get you moved up in the invoice stack in the Accounts Payable Dept if the savings are big enough.