The Deceptively Simple Purchase Order
WRITING OUT ALL THE DETAILS
Under the Uniform Commercial Code (UCC), which has been adopted by most U.S. states, any agreement between merchants to purchase goods at a price greater than $500 must be in writing. As a result, when the paper purchase price exceeds $500, the P.O. must be in writing to be enforceable, with a few exceptions (addressed later).
The price should specify not only the amount to be paid, but also:
• the currency (for international orders),
• the shipping costs,
• the payment of applicable taxes, and
• any allowable adjustments to cost based on changes either party requests during the manufacture and order-fulfillment process.
Each of these items is negotiable. So, although standard industry practice may be for the buyer to pay applicable taxes, that cost can be allocated to the supplier if the parties agree.
In international orders where the buyer is less familiar with the prevailing tax regime, the parties can agree for the buyer to pay the applicable sales and export taxes up to a set amount, after which any additional taxes will be paid by the supplier. Or, the buyer can specify the nature and amount of taxes it will pay, placing the burden on the supplier, who has greater access to local tax advisors, to accurately identify and pay for any other applicable taxes.
Bear in mind, however, that in many jurisdictions, if export taxes are not paid, the products will not be shipped. So, be certain to work with a broker or supplier experienced with filling international supply orders and ask for references. Finally, the P.O. should state that the supplier must give the buyer a receipt or invoice confirming the payment of applicable taxes.
WHAT IF YOUR PAPER DOESN'T ARRIVE ON TIME?
To ensure on-time delivery, the buyer should confirm the supplier's anticipated capacity around the delivery date and consider building into the P.O. a fee for late delivery or a bonus for on-time or early delivery (provided the printer has sufficient storage for paper delivered early). Because on-time delivery requires coordination of the publisher, printer and supplier (plus any supplier subcontractors), all parties should agree on the delivery date in writing.