The Deceptively Simple Purchase Order
Nearly everyone has seen a purchase order. The one or two pages of generously spaced text seem pretty straightforward. However, what some publishers may not know is that a P.O. is deceptive in its simplicity. Each term of a purchase order has legal and business implications which, when overlooked, can return to haunt you.
The paper-buying process—which formally begins when the buyer (the publisher or the printer) sends a request in the form of a P.O. to the paper supplier—even seems simple. But problems do occur, anywhere from unexpected issues with product quality to delivery issues, taxes and unexpected costs. Being aware of these potential pitfalls and making sure your P.O. addresses them all can save you major headaches, money and potential legal battles.
In addition to the standard (one-time) P.O., the paper industry uses several different purchase order types, including:
• blanket orders (agreements covering specific periods of time),
• confirming orders (agreements confirming orders previously issued by some other means, such as orally or electronically),
• reservation orders (used to reserve mill capacity, but not a firm commitment to buy), and
• trial orders (used to enable buyers to sample a product at little or no charge).
Be certain you are using the correct P.O. type for your project.
In P.O. language, the buyer is the party directly responsible to the supplier for payment. In the paper industry, the buyer and end user may be separate parties, such as the printer buying paper for the publisher (the end user). If the printer is purchasing the paper on behalf of a publisher, the printer is still the buyer. In that case, the publisher will be responsible for paying the printer the price negotiated for the printing project, including the cost of paper purchased by the printer.