Sales Order Processing:
What is it and how to optimize it?

Sales Order

All You Need to Know About Sales Order Processing

The actions that a business performs in order to fulfill an order placed by a customer are referred to as “sales order processing.” The modern sales order procedure has been substantially facilitated by technology, which has made this possible by giving important information to all seller touchpoints (from billing to production and logistics).

When a customer makes a purchase, regardless of whether that transaction takes place in-store, on the Internet, or over the phone, they put in motion a chain of activities that include a large number of individuals and departments within a company. Customers have grown to expect that their orders will be processed and sent quickly, regardless of the order volume or complexity that the seller may be experiencing at the time.

What Is a Sales Order?

When a vendor has the client’s sales order in their possession, it’s the same thing as having a contract between the customer and the seller. It is a common practice for the vendor to place an order in response to a request made by the purchaser. Depending on the requirements of the seller, they can either convey this information to the customer or use it for their own purposes internally. Everything, from the quantity to the delivery date, is spelled out in the sales order.

Purchase Order vs. Sales Order: What is the difference?

Is there a difference between a purchase order (PO) and a sales order (SO)? In the ordering process, some companies use the term purchase order while others use the term sales order. In principle, both terms are correct because the information in the documents is the same. When an EDI standard is used, both records are marked with the same abbreviation: ORDERS.

The use of purchase order vs. sales order is determined by the market participant. The purchase order most often refers to an outgoing order for the purchase of goods or services, while the term sales order more often is used in cases when the order is received on the sales side (incoming).

Purchase Order Template

There is no mandatory purchase order template and each organization can use its own layout. However, each purchase order is required to include the following fields for the smooth transaction process:

Purchase Order Number, Date, Purchase Order Term, Shipping Address (Ship To), Billing Address (Bill To), Ordered item description, Quantity, Price, Total cost, Taxes.

You can download the free purchase order templates from the provided files below. If you need more layouts, you can use the programs that propose free purchase order templates such as Zoho, Wise, Shopify and other.

Sales Order Processing Steps and Meaning

There are two meanings of sales orders processing term. The first meaning is actual sales order process that includes the basic steps described below:

  • The order request from the customer
  • Providing a quote for the requested goods
  • Receiving a purchase order from the customer
  • Entering the purchase order data to an ERP or accounting system and generating the internal sales order
  • Matching the sales order/purchase order data with the provided quote
  • Picking, sorting and packing
  • Shipping the ordered goods
  • Invoicing the customer

The second meaning of the sales order processing term is the paperwork processing of the order in your ERP or accounting system. To facilitate this, the sales order automation system not just saves time and money but also helps to automate such steps as:

  • Entering the purchase order data to your ERP system
  • Matching the sales order/purchase order data with the provided quote
  • Providing timely updates and order processing tracking for your customers to increase the customer satisfaction

Additional benefits that a sales order processing automation system can provide:

  • Increased efficiency
  • Reduced errors
  • Receiving timely payments
  • Improving visibility and control

Eliminate sales order processing routine with automation solution — OrderAction. The combined artificial intelligence (AI) and machine learning (ML) will streamline your order processing tasks and send the extracted
data to your ERP system.
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The Advantages of Automated Sales Order Processing

Businesses are able to handle sales orders from the time they are created until they are fulfilled with the assistance of a centralized order processing system. This capacity is adequate to fulfill orders received through any channel, including direct, channel sales, and online sales. Compared to the more traditional way of processing sales orders manually, the automated method has several significant advantages, including the following:

Reduced Amount of Time Spent Processing: Eliminating time-consuming paperwork and synchronizing everyone’s activities are two key steps toward streamlining the order-taking process. The most significant benefits will accrue to those working in marketing and customer service. Some manufacturers claim that by implementing their automation system, salespeople may slash the amount of time they spend on order processing by as much as eighty-five percent. Therefore, automation makes it possible for them to dedicate more time, resources, and attention to the more complex human aspects of customer service. The data from sales orders that have been sent via email, paper, or fax can be imported into software that is specifically built for processing sales orders.

Expenses Cut: Automating a process can save money in addition to saving time since it eliminates the need for labor-intensive manual work and wasteful repetition. When payments are received in a more timely manner, a company’s cash flow is able to remain more liquid. According to solution providers, automating the process of sales order processing can reduce transaction costs by up to 80 percent and create a positive return on investment in as little as 30 days. One provider of automation software estimates that the cost of physically processing an order will be between $30 and $60, whereas the cost of employing software will only be between $1 and $3.

Order Processing Diagram

Order Processing Diagram

Increased Flexibility: Because your system processes sales orders automatically, you can start allocating stock to fulfill an order as soon as the order is placed. When a supplier is able to observe global stock levels in real-time, it enables them to send orders from the distribution center that is geographically nearest to them, hence reducing both wait times and costs. Because the technology can discover flaws in products more rapidly, it has the potential to cut down on the number of product returns and orders that are canceled. When looking upstream, it is helpful to have a clear vision of the process in order to guarantee that everything along the supply chain is secure and safe. Insights on ways to better your suppliers and plan for disruptions are also gained as a result of this research.

Greater reactivity is the result of increased visibility across the entirety of the sales cycle, which is made possible by the automation of the sales order processing. There are a variety of indicators at your disposal that you can use to monitor the length of time it takes to process orders and evaluate your level of performance. Everyone, from the sales staff to the C-suite, has access to precise data that is updated in real-time, which enables them to make decisions that are more informed. The capacity to quickly adapt to new circumstances and remain flexible under pressure allows managers to perform their duties more effectively. Retailers are able to offer one-of-a-kind discounts and promotions to individual clients by utilizing technology. Because of increased real-time visibility into order status, the amount of time it takes to respond to a customer inquiry is drastically cut down, and orders can be amended or corrected in a shorter amount of time.

Customers Who Are Happier:Thanks to the automation of sales order processing, you will be able to keep your customers up to date on the status of their orders in real-time, which will result in increased customer satisfaction. Customer satisfaction is boosted as a result of the rapid processing of orders and the provision of discounts that are specifically catered to the requirements of individual customers. In addition, a variety of solutions enable complete independence on the part of the customer. Honesty and openness are highly valued by customers. Because there will be fewer mistakes, the profits will increase. In a word, the rapid and accurate completion of customer orders leads to increased levels of satisfaction for those customers.

Making the move to an intelligent automation for critical order processing tasks is always rewarding. The sales order processing capabilities of Artsyl’s OrderAction solution is optimized to help you reach your full potential. Book the demo to see how OrderAction solution will help you to automate your business processes and save time and money. The tight integration of OrderAction with popular ERP systems will make your orders automation work more productive and efficient.

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