marketing essentials
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Marketing Essentials. n Chapter 16 Using Math in Sales. Section 16.3 Purchase Orders and Invoices. SECTION 16.3. Purchase Orders and Invoices. What You'll Learn. To calculate and verify extensions on purchase orders and invoices To use appropriate tables to determine shipping charges. - PowerPoint PPT PresentationTRANSCRIPT
Chapter 16 Using Math in Sales 1
Marketing EssentialsMarketing Essentials
Chapter 16 Using Math in Sales
Section 16.3 Purchase Orders and Invoices
Chapter 16 Using Math in Sales 2
SECTION 16.3SECTION 16.3
What You'll LearnWhat You'll Learn
To calculate and verify extensions on purchase orders and invoices
To use appropriate tables to determine shipping charges
Purchase Orders and InvoicesPurchase Orders and Invoices
Chapter 16 Using Math in Sales 3
SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Why It's ImportantWhy It's Important
In this section, you will learn some math applications that are regularly used by buyers and vendors. In many marketing jobs, including sales, you will need to understand the costs and methods of shipping.
Chapter 16 Using Math in Sales 4
SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Key TermsKey Terms
purchase order
extension
invoice
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Purchase Order
To place an order, most companies prepare a purchase order (PO), a legal contract between the buyer and the supplier. The PO lists all the details of the purchase, including the quantity, price, and description of the products ordered, along with the terms of payment and delivery.
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Purchase Order
A purchase order is a legal contract between buyer and seller. How would you determine the extension cost of an item from its unit cost?
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Invoices
When filling an order based on a PO, a vendor will prepare an invoice which will be included with the delivered merchandise. The invoice numbers and amounts (including extensions) are correct when they match the PO and other documents.
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Invoice
The vendor (seller) prepares an invoice based on the buyer's purchase order. What categories of information does an invoice include that are missing from a purchase order?
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Dating terms state when a bill must be paid and the discount permitted for paying early. Ordinary dating occurs when the dating terms are based on the invoice date.
Example: 2/10, net 30, means a 2 percent discount is allowed if the bill is paid within
10 days, and the bill must be paid within 30 days.
Dating Terms
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
Part of the selling arrangement between buyer and seller involves who will pay for delivery and when title (ownership) will change. The terms for delivery are all variations of F.O.B. (free on board). There are four options:
F.O.B. destination
F.O.B. shipping point
F.O.B. factory freight prepaid
F.O.B. destination charges reversed
Shipping
Slide 1 of 4
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
F.O.B. Destination The title remains with seller until the goods reach their destination. The seller pays transportation charges and assumes responsibility for the condition of the goods until they arrive at the buyer’s business.
Shipping
Slide 2 of 4
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
F.O.B. Shipping Point The buyer pays the shipping costs and is responsible for losses for damage in transit.
F.O.B. Factory Freight Prepaid The goods become the property of the buyer at the factory. The seller pays for shipping.
Shipping
Slide 3 of 4
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SECTION 16.3SECTION 16.3 Purchase Orders and InvoicesPurchase Orders and Invoices
F.O.B. Destination Charges Reversed The merchandise becomes the buyer’s only when goods are received. The buyer pays for transportation, but is not responsible for loss or damage during transit.
Shipping
Slide 4 of 4
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16.3 ASSESSMENTASSESSMENT
Reviewing Key Terms and Concepts
1. Who prepares a purchase order?
2. A customer orders six triple packs of adhesive tape at $1.79 each—6 x $1.79 on your invoice. What term describes this calculation?
3. What is the meaning of the letters F.O.B. in terms of delivery?
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16.3 ASSESSMENTASSESSMENT
Thinking Critically
How could using a computer to generate invoices save time?
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Marketing EssentialsMarketing Essentials
End of Section 16.3