1. Chapter 16 Using Math in Sales 1 Marketing Essentials Chapter 16 Using Math in Sales Section 16.3 Purchase Orders and Invoices

2. Chapter 16 Using Math in Sales 2 SECTION 16.3 What You'll Learn  To calculate and verify extensions on purchase orders and invoices  To use appropriate tables to determine shipping charges Purchase Orders and Invoices

3. Chapter 16 Using Math in Sales 3 SECTION 16.3 Purchase Orders and Invoices Why 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.

4. Chapter 16 Using Math in Sales 4 SECTION 16.3 Purchase Orders and Invoices Key Terms  purchase order  extension  invoice

5. Chapter 16 Using Math in Sales 5 SECTION 16.3 Purchase 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.

6. Chapter 16 Using Math in Sales 6 SECTION 16.3 Purchase 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?

7. Chapter 16 Using Math in Sales 7 SECTION 16.3 Purchase 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.

8. Chapter 16 Using Math in Sales 8 SECTION 16.3 Purchase 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?

9. Chapter 16 Using Math in Sales 9 SECTION 16.3 Purchase 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

10. Chapter 16 Using Math in Sales 10 SECTION 16.3 Purchase 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

11. Chapter 16 Using Math in Sales 11 SECTION 16.3 Purchase 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

12. Chapter 16 Using Math in Sales 12 SECTION 16.3 Purchase 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

13. Chapter 16 Using Math in Sales 13 SECTION 16.3 Purchase 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

14. Chapter 16 Using Math in Sales 14 16.3 A SSESSMENT 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?

15. Chapter 16 Using Math in Sales 15 16.3 A SSESSMENT Thinking Critically How could using a computer to generate invoices save time?

16. Chapter 16 Using Math in Sales 16 Marketing Essentials End of Section 16.3