There’s nothing more exciting for a small business than receiving a significant purchase order. It means you’ve been chosen to supply what a buyer wants.
But don’t rush in. Once signed, a purchase order is a binding legal contract.
Below we outline what to do when you receive a purchase order (PO) in South Africa, including the following key steps:
- confirming the PO with the buyer
- double-checking your capacity to complete the order
- signing the purchase order
- completing shipping information
- following up to confirm delivery
- invoicing the client.
1. Contact the buyer’s procurement or purchasing department
Confirm with the buyer’s procurement or purchasing department that the purchase order has been awarded to your company and the details are correct, especially quantities.
This eliminates the risk of working on a purchase order that’s incorrect or invalid, wasting time and resources.
2. Carefully check your ability to fill the order
Regardless of what you advertised or pitched to get the purchase order, double check that you have the means and resources to deliver the order in full and on time.
Check your company’s inventory, supplier availability and turnaround times, as well as the available capacity of equipment and human resources.
It’s also vital to check your company’s current cash flow. You must be able to pay for the necessary supplies to complete the order.
Get funding if it’s needed: Don’t miss the opportunity to grow your business because of cash-flow issues. BizFunding partners with SA businesses, offering fast, easily accessible purchase order funding so it’s possible to pay suppliers and fulfill orders on time. Pay us back only once your business gets paid.
3. Sign the purchase order
When you’re sure everything is in place and you have the resources to fulfil the order, sign the purchase order. This makes it a legally binding agreement.
Contact the buyer to confirm you can deliver what they need.
4. Include the purchase order number when shipping the order
When the job is complete and the goods are being shipped, include the purchase order number with the shipping information.
This will help the buyer identify the order and confirm that it has been fulfilled. Without this information, the buyer might erroneously think you haven’t delivered.
5. Follow up to confirm acceptance of the shipment
Good communication throughout the acceptance and fulfilment of a purchase order is vital.
It’s good practice to follow up with the buyer to ensure that they’ve received the shipment and that everything is in order.
This attention to detail will help you secure future purchase orders and will positively impact your reputation.
6. Send your invoice
The purchase order number should be included on the invoice. This lets the buyer know which order the invoice relates to.
This is a best-practice process in business known as three-way matching. Three-way matching is when the invoice is cross-referenced with the purchase order and the delivery information to make sure the details match.
This includes information such as the amount to be paid, the number of items ordered and the name of the company to be paid. Three-way matching eliminates potential errors.
At BizFunding, we partner with small businesses to provide the necessary funding so you can accept and complete purchase orders with confidence. Once you have a signed purchase order, get funding in just a few easy steps. Apply now or contact us on 012 001 0095 for more information.
