Accepting POs...

[CodeRedSupport]

I do freelance work for a number of small companies. Generally I get paid by cash or check. I've just been asked if I accept purchase orders.

What do I need to know and/or do to safely and responsibly accept a purchase order?

Thanks to anyone who can help. I just joined this forum.

[fthom]

Purchase orders aren't actual forms of payment...they are just contract-type documents that state what work will be done and payed for and in most cases this is better for you are it guarantees you will be payed. However, the payment order is backed up by invoices etc. so payment just goes on as normal. Do you not use contracts anyway when doing work? If so then a purchase order is quite similar!

[Vaze]

Unless the purchase order is coming from a large company it really isn't worth anything. A small company could just as easily give you a purchase order number that is made up as it doesn't have anything backing it up i.e. its the same as saying do the work and bill me.

Best

Parvaze

[CodeRedSupport]

So if I decide to accept the offer of a purchase order, what is the next step?
Do I need to issue a quote?

[kompedge]

Unless you have "set prices" you will need to provide a quote. They will in turn provide you with a PO that has the product or service you quoted them on. Once you have completed the work or shipped the product, you will need to send them an invoice for the price agreed upon. Make sure you reference their PO number on that invoice. You will have to decide what payment terms you will be extending. Net 15 and Net 30 are the most common.

A PO never guarantees payment but you can do a credit check on companies or individuals that want to pay this way. It is really the way business is done on the big scale. You just have to make the decision on whether or not you can handle the risk.