How To Accept A Purchase Order

At last – after all your hard work the fax machine finally spit out that order you were desperately waiting for. Now you can sit back on cruise control for a few weeks and enjoy the fruits of your labor.

Not so fast. There are a few things you need to do right now that are basically the equivalent of pushing papers around; which I know we all hate. It is important at this time, however, to make sure the order is as expected and nothing changed on either end that will put the timely completion of that order in jeopardy.

Purchase Order

It doesn’t seem like there should be a problem here does it? Well, there probably isn’t, this is more of preventative maintenance. You need to make sure that all is well and as expected before you close the book on this order.

If something is wrong with the order and you catch it right now, it can usually be resolved with a quick phone call. If, however, many thousands of dollars of work is put toward completing that order and then you realize there was an error in the paperwork, tempers can flare and relationships become ruined.

We’re going to develop a checklist in this article to help make sure that the purchase order you just received doesn’t become a headache you can’t get rid of. The steps to be covered include:

  • Verify purchase order components
  • Record order in your CRM system
  • Double check delivery date
  • Issue internal job order number
  • Acknowledge receipt of order

Verifying Components of a Typical Purchase Order


This one is pretty easy. Make sure that the per unit price and the total price matches the values put forth in your quotation. If they don’t it is usually a simple mistake on their part and a quick phone call to the buyer will clear things up. I like to handle this one by calling the buyer and not the engineer – no need to give the engineer extra work to do at this point.


This is an important item. It can be months from the time you quote your work until you see a purchase order. The lead time originally quoted might not be valid anymore and you need to rectify that and set the buyer’s expectations straight. Here you need to call the buyer to fix the problem and the engineer to explain the situation. If it’s a dire need that they have faster delivery, see if your team can work weekends and overtime; but never promise a delivery you can’t meet just to make your customer happy in that moment.

Payment Terms

Big powerful companies will often ignore that you quoted “net 30 days” and put “net 60 days” on the order. Your call what to do here. Typically there isn’t much you can do to sway their position; if you can live with it, I’d let this one go. Then the next time you quote it, build the extra 30 days of extended pay into your quoted price (i.e. 30 days of interest on the total proposal value). If you get questioned about the slight price increase, tell the truth and stand your ground.

You might also see something like “1.5% net 10” that means that they can deduct 1.5% of the total contract value if they pay within 10 days of receiving final delivery of your product – or receiving your invoice. I have a big customer that takes their net 10 days discount after about 90 days on terms of net 45. And you know what? There isn’t a darn thing I can do about it. Ever hear of dancing with an 800 pound gorilla? You can’t lead them.

If their payments stretch well beyond even their stated terms you can tell their buyer. “Look, I accepted your terms over our’s because I value your business, but we just can’t afford to finance your projects like this anymore. If you won’t pay on time, you’re going to force us to put a payment penalty clause in our next contract with you.” Act humble and almost embarrassed that you have to say this – don’t be rude or act mad.

Contract Terms

Typically when you quote out work, you attach your general terms and conditions to it. When you receive a purchase order, it typically comes with its own set of T&C’s, as they’re called. Again, not offering legal advice here, but you need to be careful here. When you acknowledge and accept their order, it can mean that you accept their T&C’s over your own. Even if you don’t acknowledge their order, a lack of action on your part may imply acceptance, so you’re still in the same boat. Bottom line here is to review the attached T&C’s and talk with your attorney about how you should handle competing terms. I usually state on the quote that our T&C’s supercede anything that the customer puts forth in response.

Shipping Method

Typically a quote goes out for the price of goods and does not include shipping. If this is the way you quote, make sure that’s clear on your quote so that the buyer isn’t surprised when there is an adder onto their invoice that puts them over some predetermined spending limit. Also, oftentimes, your buyer will have an account with their preferred shipping vendor. Take heed what that is and make sure that you use it come shipping time. It might not seem like details such as this should fall into your responsibility as a salesperson – but it is your responsibility to ensure that the buyer’s expectations are met at every step of the sales and order fulfillment process.

Order Verification

It is common that a purchase order will come in with a blank box calling out for your signature and return as proof that you received the order and accepted it. This starts the clock on the delivery promise. This is the time and place to rectify any discrepancies between your quotation and the order. Each company is different on how they handle this step; I prefer to have the quality manager sign off on this rather than sales. Doing so provides a safety check to make sure that you’re not missing something.

Record Order in CRM System

Even if you have to use a combination of Excel and Outlook, you need some type of customer resource management (CRM) system, or at least a contact management system. For small to medium size companies, and even large ones that isolate sales from the rest of the operations, software such as Act! and are a perfect solution. There will be other white papers to follow on how to effectively use these tools, but an important component is to record when you get an order against each quotation you send out.

After several orders come in, you will begin to decipher patterns in your customer’s buying behaviors. Do they buy once every six months? Have their quantities been going up? Down? Dig in and understand what’s going on. If they often complain that your twelve-week lead time is too long and you’ve uncovered a pattern of orders every nine months – call them five months ahead of time to secure an order and make your lead time seem acceptable.

Sometimes you have to help manage your customer’s business for them.

Double Check Delivery Date

As mentioned above, one of the very first things you should do when a fresh order comes across your desk is to verify that you can still meet the project delivery date. Sometimes, the engineer will call and tell you that an order is on the way. You patiently wait for the fax to come through to start the work (and the clock). The customer, however, probably started their clock when the engineer blessed the order and sent it to his procurement department, which can take weeks to actually issue the order. This lost time is not your fault, so catch it and fix it now.

Issue Internal Job Order Number

Every company handles this task differently. Make sure that you get your new order an internal job number as rapidly as possible so that production is aware of the order and can start fulfilling it. I typically recommend sending production a heads-up that the order has been received and they will see it tomorrow (or however long it usually takes to route through your system). Again, take this task as your responsibility.

Verify Receipt of Order

After you’ve reviewed the T&C’s and double-checked with production on the scheduled delivery date, you’re ready to acknowledge the order with the customer. As I’ve mentioned above, executing this step relays to the customer that you accept their order and all terms attached or included with that order – so be sure to review it carefully.

If there are items in the order that you don’t agree with, you have two options.

  1. Call the buyer or engineer and tell them (a) what you have a problem with, (b) why you have a problem with it, and (c) how you propose to rectify the issue. An example would be that you have a problem with the delivery date of April 3 because you quoted a four week delivery after receipt of order and today is March 30 and you’d like to have them change the date to April 30. After agreement is made on the call, send them a confirmation email detailing the call.

  2. The second option is to fax or email the order acknowledgement to your customer with your exceptions clearly stated in writing. An example would be “Your order number P1234 has been received and [your company] accepts it with the exception of the delivery date. A delivery date of April 30 will be accepted.”

I’m not a fan of option number two, although it is a more popular option for certain. The problem is two fold. You miss out on an opportunity to talk with the customer and understand why the order was wrong in the first place. And secondly, it seems a little legally unclear if your stated exceptions are now the agreed to terms, or if the customer needs to reply back in writing that they accept your modifications.

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#1 raburdee on 12.15.10 at 9:50 pm

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#2 Geoff Hughes on 02.20.14 at 6:41 am

Best summary resource I have found thus far. Thank you.

#3 Jonas Ezeanya on 08.04.14 at 1:30 am

This Has Been A Useful Write-Up On Accepting Purchase Orders. Thanks, I Really Needed It.

#4 Speaking In Public Training on 08.04.14 at 1:57 am

I Would Like Specific Information On How To Accept A Purchase Order Like, Do I Have To Print Out, Sign It, Stamp It, Scan And Send? How, EXACTLY?

#5 Fernando Chavez on 05.11.16 at 9:40 am

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#6 Fernando Chavez on 05.11.16 at 9:40 am

I Would Like Specific Information On How To Accept A Purchase Order Like, Do I Have To Print Out, Sign It, Stamp It, Scan And Send? How, EXACTLY?

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