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Jun 08

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When To Reject A Purchase Order

ID-10098841Rejecting an order is hard to do. There’s the voice in the back of your head warning that you may lose the customer altogether.

Depending on your industry, there’s a risk with every order you fill. You know those risks like the back of your hand. However, it’s not like you have zero control. You take measures to reduce your risks every day. When it comes to POs, minimizing the risk starts with those who process them.

Your order-entry and sales personnel are a great line of defense for catching any deal-breakers that find their way onto a PO. Train them well and save yourself some headaches.

Personnel should decline a purchase order in the following circumstances:

  1. PO lists incorrect credit terms
  2. Pricing is incorrect
  3. PO references a return policy that doesn’t match yours
  4. PO lists penalty clauses that are not part of your normal terms of sale
  5. PO lists FOB (freight on board) terms that differ from yours
  6. PO lists a different legal name from your records

“Decline” does not mean the sale is off. Once brought to his attention, the customer may rectify any point by submitting a written amendment.

A botched PO that makes it through the entire fulfillment process can be a potential time bomb. An incorrect price, for instance, may lose you money to the customer’s gain. And he’s going to do exactly what you think he’s going to do: hold you to the price on the PO. And he’d be in the right.

Insist upon careful inspection of every PO down to the letter and insist upon written amendments (no oral agreements allowed). Make it right the first time to avoid wasted time and money.

Permanent link to this article: http://c2cresourcesblog.com/reject-purchase-order

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