im a newbie and i am making t-shirts for a student run organization that is funded by a university. I was wondering how to deal with purchase orders since they cant send a check unless they get the t-shirts. What can I do if I get multiple organizations that have the same policy? Should I take a loan out? Pay for my blanks with a credit card? any advice would be of help. thanks.
purchase orders
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hi,
When you get a lot of PO's try to finance it yourself if you can.
If you can't finance it yourself, get all your SIGNED purchase orders together and contact a Factor in your area, Factors take a few points and lend you the money for producing the goods. This is a common way how a lot of manufacturers operate and supplement their cashflow. As you are trying to do.
When you get a lot of PO's try to finance it yourself if you can.
If you can't finance it yourself, get all your SIGNED purchase orders together and contact a Factor in your area, Factors take a few points and lend you the money for producing the goods. This is a common way how a lot of manufacturers operate and supplement their cashflow. As you are trying to do.
This is a whole side of Shirt Printing that I havent found addressed here....Thanks for the Post..... I try to collect a deposit of half on all orders and as you pointed out this isnt always possible... Occasionally it is possible to have a great deal of money tied up in non-deposit orders when they come in back to back.... With any amount of volume it doesnt take long to have a great deal of money tied up in orders..... What makes it worse is the People that make Non-Deposit orders, as a rule don't seem to come pick them up as fast as the Ones a deposit were left on.... And seem to be more apt to call in changes and add ons..... It seems to run in trends here.... I seem to get a lot of Non-Deposit orders all at once.... then nothing...then on the other side of the coin ..I'll get alot of paid in full in advance orders all at once..... Its a Finacial Roller Coaster Ride that seems to change trends with the Wind.... I will be interested in reading the other Replies to your Post......srulibob said:
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First, never give terms more than 30 days.I have been in retail for over 30 days and was never offered more than 30 days by anyone. And the last 10 years with the federal government and we still could not get more than 30 days. Second, if these are custom shirts then get 50% up front. I don't know what amount you are dealing with but I would not, never, nit, nano, nope and eh eh. Bring another party financially into this unless it was my credit card. If your going to do this you just need to get more money in your bank account but i would not start by getting loans. If you are financially strapped then I would ask a family member for the extra funds also. How big could this be?
Hey Lou!!! You lookin to adopt? I'll let ya know how big it can be after the Adoption Papers are signed, Dad.....badalou said:
I agree with Lou 100%...although there are circumstances that doesnt allow for a deposit... I do Shirts for the Marine Corp.. Did some recently with their new Osprey Aircraft, that has been in the news lately....The Orders are too big to pass up yet theres no way in the world the Marine Corps is gonna pay a deposit.... they have the attitude that they are bestowing an Honor on you just because they are doing business with you..... An unacceptable attitude from a business but just everyday part of doing business with the Military...
Its all part of the never ending Chess Game called Self-Employment..I'm sure you'll find an answer....... Good Luck.. Chuck
hey Lou, I tend to agree with you on the 30 days, 50% deposites and so on....
BUT
A lot of companies are set up where they can not provide you with any payment with out a Purchase Order and the whole thing may take 60 days or more before it all goes thru their payables dep. before you get paid. These are usually good accounts and orders $$$$$$.
THAT IS WHY FACTORS EXIST.
With Factors, you basically sell them your SIGNED Purchase orders, they give you the cash less their take and your Customer Pays the Factor Directly. Dealing with a Factor it also eliminates all Accounts Receivable on your part, so if the client does not pay, it's up to the Factor to collect.
Factors have a standard credit application that needs to be completed by your client, then you send it allong with the Purchase orders.
After you are set up with a factor on a regular basis, it all woks very easy and with Big Companies/Customers even easierrrrr !
hope this opens another prespective into not falling into cashflow problemas.
BUT
A lot of companies are set up where they can not provide you with any payment with out a Purchase Order and the whole thing may take 60 days or more before it all goes thru their payables dep. before you get paid. These are usually good accounts and orders $$$$$$.
THAT IS WHY FACTORS EXIST.
With Factors, you basically sell them your SIGNED Purchase orders, they give you the cash less their take and your Customer Pays the Factor Directly. Dealing with a Factor it also eliminates all Accounts Receivable on your part, so if the client does not pay, it's up to the Factor to collect.
Factors have a standard credit application that needs to be completed by your client, then you send it allong with the Purchase orders.
After you are set up with a factor on a regular basis, it all woks very easy and with Big Companies/Customers even easierrrrr !
hope this opens another prespective into not falling into cashflow problemas.
Incredibly interesting never even heard the term "Factor" before.... Is this a canadian thing? or is there simular operations here.... It would be of little to no use for the everyday walk in order but very very helpfull when dealing with the very Large ones... Gonna do a search an see if I can learn more..... ThanksLucyRoberts said:THAT IS WHY FACTORS EXIST.
With Factors, you basically sell them your SIGNED Purchase orders, they give you the cash less their take and your Customer Pays the Factor Directly. Dealing with a Factor it also eliminates all Accounts Receivable on your part, so if the client does not pay, it's up to the Factor to collect.
Factors have a standard credit application that needs to be completed by your client, then you send it allong with the Purchase orders.
After you are set up with a factor on a regular basis, it all woks very easy and with Big Companies/Customers even easierrrrr !
hope this opens another prespective into not falling into cashflow problemas.
hummm, yep, it does sound t00 good be true ... don't IT.
here is one company i know nothing about: http://www.capitalfactors.com/
there are 1000's in the USA.
Thank you for the Information.....LucyRoberts said:
yep, it does sound t00 good be true ... don't IT.
here is one company i know nothing about: http://www.capitalfactors.com/
there are 1000's in the USA.
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I agree with Lucy on the factors. They can be great.
Here's a little more info:
http://www.t-shirtforums.com/showthread.php?t=1847&highlight=FACTORING
Here's a little more info:
http://www.t-shirtforums.com/showthread.php?t=1847&highlight=FACTORING
Squirt is my 6 Year Old Chihuahua Thats why we put the little Paw Print on our Logo...She says Thank You! LOL and Greg Thanks for the Thread Link..LucyRoberts said:...well thank you Squirts, I'll take a bow.
by the way, I love your handle " Squirts ". LOL
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Yep, how 'bout that!
P.S.
Is there a blue moon?
P.S.
Is there a blue moon?
Factor companies can be somewhere between a bank and a loanshark so be sure to talk to more than one before you decide on one.
Another way to speed up payment is to offer 1% Net 30. Which is to say they get Net 30 days to pay you, but if they choose to pay you immediately (or maybe Net 10 1% Net 30) you are offering a 1% discount. Large companies and sometimes government entities (where money is not the problem, but the bureaucracy is) have rules that state they must take a discount if offered, especially is taxpayer money is involved. The company might then send you a check right away and you'll see something on the stub about "1% discount taken" and the check amount will reflect that. Some people even do 2-3% early pay discounts. If a client you work with is willing to do that, the 1% hit you take should be less than any financing you'd have to pay for to cover your cash flow any other way. Just ask next time if they take early pay discounts.
Also take your credit history with your suppliers VERY seriously. These problems are usually solved when the first big vendor gives you the opportunity to pay Net 30. Don't mess it up! If you get a bad rap in the credit game you'll never be able to avoid this cash flow trap (except by only doing small, cash up front jobs).
Daxman
Another way to speed up payment is to offer 1% Net 30. Which is to say they get Net 30 days to pay you, but if they choose to pay you immediately (or maybe Net 10 1% Net 30) you are offering a 1% discount. Large companies and sometimes government entities (where money is not the problem, but the bureaucracy is) have rules that state they must take a discount if offered, especially is taxpayer money is involved. The company might then send you a check right away and you'll see something on the stub about "1% discount taken" and the check amount will reflect that. Some people even do 2-3% early pay discounts. If a client you work with is willing to do that, the 1% hit you take should be less than any financing you'd have to pay for to cover your cash flow any other way. Just ask next time if they take early pay discounts.
Also take your credit history with your suppliers VERY seriously. These problems are usually solved when the first big vendor gives you the opportunity to pay Net 30. Don't mess it up! If you get a bad rap in the credit game you'll never be able to avoid this cash flow trap (except by only doing small, cash up front jobs).
Daxman
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