Understanding Purchase Order Costs

Understanding payment terms

Payment terms refer to the amount of time extended to pay a wholesaler. Payment terms agreements between  you and your vendor can be applied to a PO. They can also be added to wholesale customers to flag orders that exceed the payment terms. Sometimes, discounts are applied if the payment is completed by a set time frame.

There are two important terms to know when adding or configuring payment terms in Sellercloud:

  • Credit Limit refers to the amount of credit extended.
  • Credit Term is the period of time the credit is extended.

For example, a customer may have a $5,000 credit over 30 days. Even if the customer uses only $2,500 in the 30 days he must still pay the balance before being issued credit again. At this point Sellercloud will not prevent an order from being shipped when exceeding the credit term.

However, you can track the orders by opening the customers account and clicking on Orders in the side menu. If the customer went over the limit, a link will appear where you can view those orders and manually prevent their shipping.

Applying payment terms to POs

Click here for instructions about adding payment terms to Sellercloud.

Alpha interface

  1. Go to Settings > Payment Terms and Credit.
  2. Press Add Payment Terms.
  3. Complete the fields > Save.sellercloud add new payment

Delta interface

  1. Go to Settings > Client Settings > Show more… > Payment/Credit Terms.
  2. Press Add Profile.sellercloud payment terms add profile
  3. Complete the fields > Save.
Click here for instructions about adding payment terms to wholesale customers.

Alpha interface

  1. Go to Customers > Open a Customer.
  2. Select the payment term from the Credit Term dropdown. The Days to Pay value will be used as the term value. Configure a credit limit and select a billing cycle date to begin the credit term.
    • When the payment term and credit is exceeded, you will not be able to create an order for this customer. This can be controlled by Allow to create over Credit Limit WholeSale orders in Client Settings
    • If the order is cancelled or returned, the customer’s account will be credited with the order total

Delta interface

  1. Go to Customers > Manage Customers > Open a Customer.
  2. Click Edit > Go to the Wholesale Options panel.
  3. Select the Credit Term > Enter the Credit Limit and Billing Cycle Start Date. The Billing Cycle determines the credit term start date.
    • When the payment term and credit is exceeded, you will not be able to create an order for this customer. This can be controlled by Allow to create over Credit Limit WholeSale orders in Client Settings
    • If the order is cancelled or returned, the customer’s account will be credited with the order totalsellercloud customer payment terms
  4. Save.
Click here for instructions about automatically adding vendors to POs.

Alpha interface

  1. Go to Company Settings > Toolbox > Vendors > Select a Vendor.
  2. Select the payment term from the dropdown.sellercloud vendor payment term
  3. Under Client Settings, select Print Payment Terms on PO PDF.

Delta interface

  1. Open a Company > Toolbox > Vendors > Select a Vendor.
  2. Click Edit > Go to the Payment panel > Select the Payment Term > Save.sellercloud vendor payment terms
  3. Go to Client Settings > Enable Print Payment Terms on PO PDF.

Understanding PO extra costs

You can add extra costs to a purchase order. Extra costs include shipping or third-party costs that are not included in the price of the item. These costs are often not billed to a third party or the vendor.

Enabling Consider PO Extra Costs when Calculating Product Costs in the Client Settings will average these costs into the product’s cost to give an accurate profit and loss report. An extra column will display next to each line item in the PO: Extra Cost Per Unit.

Custom extra costs

The Extra Costs page also lets you enter and define additional costs and set the distribution method per unit of each cost. Custom extra costs will not be included in the PO Grand Total.

Small order item fee

If a Small Order Amount and Fee has been configured on the vendor, the fee will display as Small Order Fee in the Payment panel. When applicable, it can be calculated in the PO total cost.

Shipping and other costs

Shipping and other costs are divided per unit. The method of calculating the PO extra costs per unit is based on the Client Setting Divide PO Item Extra Cost using:
  • Equally— If the product cost is $50.00 and shipping cost is $5.00, the average cost on the product’s Purchasing page will be $55.00. If you ordered 2 units with a total PO shipping cost of $5.00, the average cost will be divided among the units ordered, resulting in an average cost of $52.50
  • Cost Based— If there are different products in the PO with varying costs, the extra costs will be distributed in proportion to the items’ cost, and then divided per unit of each item
  • Weight Based— If there are different products in the PO with varying weights, the extra costs will be distributed in proportion to the items’ weight, and then divided per unit of each item

You have the option to exclude shipping costs in the PO Grand Total. This is helpful if you are paying a third party for shipping. This is controlled by enabling Do not include Third party shipping in PO Grand Total in the Client Settings.

Click here for instructions about adding extra costs to POs.

Alpha interface

  • Go to Client Settings > Enable PO Custom Extra Cost Per Unit.
  • Open a PO > Select Action > Upload Extra Cost Per Unit > Go. Here, you can download the template, add the extra costs, and import it back.sellercloud epload extra cost per unit

Delta interface

  1. Go to Client Settings > Enable PO Custom Extra Cost per Unit.
  2. Open a PO > Toolbox > Extra Costs > Edit.
  3. You can add costs manually or upload in bulk.
    1. Click Add Extra Cost > Complete the fields > Save. sellercloud add extra costs to a po
    2. Or, click Upload Products > Select a File > Save. If you need a template, click Download Template.sellercloud upload extra costs to a po

Converting currency rates on POs

When purchasing from international companies, you may need to purchase in the local currency. Sellercloud POs support international currency and let you define the rate of conversion on the PO. Learn more about selling on international marketplaces.

Click here for instructions about converting currency rates in the Alpha and Delta interfaces.

Alpha interface

  1. Go to Client Settings > Enable currency symbol for PO.
  2. Open a PO > Choose the Currency > Enter the Rate to US$ and Rate From US$.
    • The cost values of the products will be entered as the international currency, but will be converted for average cost when received, based on the conversion rate set here.sellercloud currency conversion

Delta interface

  1. Go to Client Settings > Enable currency symbol for PO.
  2. Open a PO > Edit > Go to the General panel.
  3. Select the Currency > Enter the Conversion Rate to US dollars.
    • The cost values of the products will be entered as the international currency, but will be converted for average cost when received, based on the conversion rate set here.

Managing free items in a PO

Vendors may offer a deal for free items, such as buy 10 get 2 free. When the purchaser sends the PO to the vendor, they create two different lines for the same item – one at full price and one free.

An item that already exists in a PO can only be added on a separate line with a price of 0 by using a file upload.

By default, Sellercloud will not factor items priced at zero dollars into its Average Cost calculation, but you can enable Allow Free PO Items to affect average cost in Client Settings to include these items.

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