Know
your vendors
How can you track and manage all the details about hundreds of vendors
you do business with?
PO
Q&A
How do I keep certain staff members from ordering too much? Get answers
to this and other important questions, along with some guaranteed
great ideas.
Making
the perfect PO
10 tips for clearer, more complete purchase orders
Adding logos, distribution copies & more...
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the PO newsletter:
 Purchase
Order (556k) |
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By Mindy Williams
Production, account service, and creative people think
they don't need purchase orders. At first, purchase orders seem
too time-consuming ("we're on a rush, so I called it in"), pointless
("the printer does this kind of job for us all the time") and
get in the way of the agency's real work.
But not using purchase orders throughout your production process is needlessly
risky to your shop. Why? Without purchase orders, you're putting your
vendors in control of the work they do, when it's to be delivered, and
how much it costs. And while they may have always taken verbal orders
from your production staff, things can get ugly when there's a problem.
The problems are all too familiar: A job is late because the vendor got
the deadline wrong. A vendor didn't get a revision and printed the job
wrong. Or a vendor invoice arrives that's way over budget. Without a
written, signed authorization to deliver a job (i.e., a purchase order),
in disputes it'll always be your word against theirs. .
When problems like these happen and fingers start to point, the agency
always loses in the end. Yes, you may get credit from the vendor, but
at the cost of the shop's relationship with them. The solution is to
prevent these kinds of communication problems before any work begins.
And that means starting with a purchase order.
"We went for two years without using POs and paid the price for waiting so long," says
Kim Snider of On Fire Design. "We initially operated from different locations
for accounting and operations. The problems of not having a PO system in place
began when vendor invoices were paid for much higher amounts than what was originally
contracted."
A simple form can save the day
The purchase order is a simple form that documents what goods or services
you're requesting from a vendor. A purchase order may be written on a
client's behalf (e.g., printing, delivery, ad space, etc.) or for the
agency's use (i.e., supplies). In all cases purchase orders clearly explain
what is being ordered, when it is due, and how much it will cost. The
vendor should be mailed or faxed a printed and signed purchase order.
Continued on the next page
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WHY PURCHASE ORDERS MATTER
Half of ad agencies surveyed don't
use POs when they buy from vendors. What does one half know that the
other half doesn't?
Control Issues:
All About Accountability
C&P allows anyone in the company
to write POs, Just what a staff member can and can't do with POs is determined
by... more
PREBILLING
POs = FAST CASH
For improved cash flow,
prebilling is the way to go, If your clients are a little slow
to pay, it makes good financial sense to not wait for the vendor's
invoice to come in to bill your clients. After all, your show
is not your client's bank!
While C&P automatically
reconciles POs with vendor invoices, some POs will need special
attention.
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