As a registered eBay business seller you will receive a monthly invoice from eBay for any fees that are due. If you have an eBay Shop you will also pay a fixed monthly fee. The amount will depend on whether you opt for a basic eBay 'Shop', an enhanced service or the top of the range package (the fee charged for a basic shop is significantly lower than for a top of the range 'anchor' shop).
When you register as a seller you will be assigned a monthly 'billing cycle'. You will be given a date, for example the last day of the month. You will normally then receive an email invoice within five days of this date. You can pay your monthly fees by cheque, postal order, PayPal, direct debit or by putting your card details on file with eBay. If you choose the last option, your card will normally be charged about 7 to 10 days after you receive your monthly invoice.
If you don't have a direct debit in place and haven't placed your card details on file, eBay will give you a £15 trading limit. If unpaid fees exceed £15 your account will be suspended until you pay. Note that eBay requires full monthly payment of account balances of £1.00 or more and may suspend accounts that are overdue.
When you receive an invoice, the organisation you owe the money to is your creditor until you pay it. When you pay what's owing, that amount is a 'payment to creditors'.
It may be that you buy most or all of your stock from places like car boot sales, markets and private sellers. If this is the case, then you will pay for your stock there and then - these payments are referred to as 'Cash purchases'. However, if you regularly buy stock from wholesalers, importers and distributors then you will probably want to set up an account with them.
When you buy supplies on account instead of paying cash there and then, your suppliers are your creditors until you pay them. Enter in your cash flow forecast any payments that you expect to make to your creditors (including VAT) in the months in which you will pay them.
To set up an account with a supplier you may be asked to provide bank and trade references. Until the account facility has been granted you will have to pay for your order at the time you place it. This is known as paying on a pro forma basis.
Once your account has been set up you will be invoiced at regular intervals - often monthly - and expected to pay within a certain number of days of receiving the invoice.
Discounts from suppliers
You may be offered, or be able to negotiate, various discounts from your suppliers. Examples might include:
- early settlement discounts
- retrospective rebates
- volume discounts
In some cases suppliers may impose minimum order conditions and charge for delivery.