Selling goods to schools and councils

[SillyJokes]

We sell a range of goods which are often used by schools and councils for events however we always have the same problem.

They want us to send the goods and invoice them.

Although we are online we are a retail outlet and do not send goods out without payment. The staff usually end up purchasing from us with a personal card and claiming the money back.

How do these bodies purchase stuff usually? Do they get Woolworths to deliver and then invoice? I don't think so.

We do not have the time and resources to chase these invoices and we certainly wouldn't expect a new supplier to operate on these terms.

Has anyone any great suggestions on how to handle this market, which is actually a very lucrative one?

[gj]

For school events it is often the PTA or Friends of the school who organise it and the payments are coming out of those funds - not the schools account. It is true that generally the individuals run around buying various things either with cash from the funds or by their own credit card and then claim it back. In theory they shouldn't have a problem with payment with order but I suspect that they often leave it until too close to the event and then need things sent urgently ie without waiting for cheques to clear before goods are despatched.

The PTA probably doesn't have internet banking either, which would at least give you cleared funds when received into your account.

What sort of volumes are the councils ordering in! If it is large vaue orders then why not invoice - the time spent chasing for payment wouldn't be huge but if it gets you the profit on the order it may be worth it.

If small value per order then you are in the same situation as for schools I guess.

Have you in fact identified that there is a market for your products from schools and councils who would rather buy on credit because it suits their system? Might this give you an edge over your competition?


Graham

[Oakfield]

You have probably found a solution to your problem already, but if not i think i might be able to help.

I dont know how large your business is or who your major customers are - but have you thought about factoring? (business to business only)

Factoring would enable you to supply goods to schools/councils/businesses without payment first. All you would need to do is submit the invoice to the factor, who can release up to 80% of the invoice value within 24-48 hrs. This allowing you to put the cash where you need it most!

The factor would then chase the invoices on your bahalf and once payment is received for the invoice would then pay you the rest.

Might be worth looking into this? If you want to find out more visit www.charterhousefactoring.com. or post your email address and ill email you some info.

[BMS]

Hi Silly Jokes

Unfortunately with organisations such as schools and councils there is little chance of getting up front payments for goods as this is not how it works.

I understand that as an online business you are used to getting payment for goods prior to dispatch but if you want to trade with these people you will have to bite the bullet on 30 days eom (probably).

Having said that as long as the paper trail is in place chasing the invoice is not that time comsuming or difficult. My experience with councils is that they are reasonably forthcoming with regards to payments and in some cases will pay withing 14 days of invoice date.

Just make sure that they are aware of your terms of payment when they place the order - you have their purchase order - you have a signed delivery note - you send copies of all paperwork with the invoice - you send a statement before invoice is due - you give them a quick call on day invoice is due to confirm payment date .........simple.

We offer a small scale credit control service if you are interested !!!!!


One last point - factoring will cost you.

[Rob Holmes]

Hi - heres how we do it (we deal with lots of organisations that claim not to have credit cards)

We give them 14 days to pay via invoice but if they are late the facility is withdrawn for the future and they have to get a credit card and pay online.

If we want someones business enough we'll give them product then invoice but if they mess us around (we provide hosting for some major companies that took 4 months to pay us last year) then we switch back and it's up to them if they stay with us or not.

Quite often we hold out and when they finally realise it's not our normal practice they miraculously find a credit card!

They may not have a card but that should not stop them paying quickly!

Rob

[Ian J]

We offer a small scale credit control service if you are interested !!!!!


One last point - factoring will cost you.

Is your service free then :D

Whilst asking a member of staff to buy something personally from you on behalf of their employer may work in some cases it won't every time and you could lose out on business.

Schools tend to buy mainly from wholesalers and they tend to buy on open account terms so if you want to gear up properly for this market you may have to bite the bullet and invoice and wait for your money.