Making Order Processing Efficient
Sales and Purchase Order Processing:
Uncovering Hidden Efficiencies

Why Order Processing Operations Must Be Improved

Customer order processing, first and foremost, is a document-intensive task. And when you receive a couple of 100 orders every week or month, there is a need to have in place an efficient order processing system that hastens the workflow from reception to final delivery.

Why, you ask? Simply because the buyer dictates today’s market. The buyer decides a company’s longevity, so first impressions are essential. When you delay order delivery, there is a good chance your buyer and the potential long-term customer may take his business elsewhere.

If product quality is one factor, service delivery and speed are other critical factors determining customer engagement in any industry segment. Especially for small and mid-sized businesses with limited capital and personnel, the need to constantly be on top of order management and deliver on time is constant and overwhelming.

Even with an organized, skilled staff in place, there is always scope for human error to creep in and delay the process.

Which Industries Struggle with Order Processing the Most

Which Industries Struggle with Order Processing the Most

While order processing efficiency can vary across industries, some industries face more challenges than others. Here are a few industries that may face difficulties in order processing:

• Retail businesses often handle a huge number of orders, especially during peak seasons. Managing inventory, coordinating shipments, and ensuring timely delivery can be complex and prone to errors.
• Manufacturing industries rely on efficient order processing to fulfill customer orders and maintain smooth production operations. Delays or errors in order processing can disrupt the entire manufacturing process and impact customer satisfaction.
• E-commerce: With the rapid growth of online shopping, e-commerce businesses face unique challenges in order processing. Dealing with a high volume of online orders, managing returns and exchanges, and coordinating shipments to various locations require robust order processing systems.
• Wholesale and distribution industries often handle bulk orders and multiple shipments to different customers. Coordinating orders, managing inventory, and ensuring accurate fulfillment can be complex and time-consuming.
• The healthcare industry, including hospitals and clinics, relies on accurate order processing for medical supplies, equipment, and pharmaceuticals. Any delays or errors in processing orders can have serious consequences for patient care.

It’s important to note that these challenges can be mitigated with the right order processing systems, automation tools, and streamlined processes tailored to the specific needs of each industry.

The Trouble with Manual Order Processing

Manual order processing is inefficient. And more importantly, when your business starts to grow, you must have robust management that can hasten processing as the number of orders grows.

For small and mid-sized businesses, this means investing in more manpower and capital, which is difficult. Growing companies struggle to juggle resources, capital, and any cash they have reserved to get the right management solutions and tools to accelerate business.

Also, if you’re drowning in paperwork, constantly trying to match purchase orders to inventory, with little time for important stuff like order validation and verification, you are bound to make a mistake somewhere along the process.

The trouble with mission-critical functions like order processing is that a mistake along any part of the processing chain can reverberate and derail the entire process, forcing companies to resume processing for that particular order all over again.

This can prove very costly for companies having just the right amount of resources to get work done. Other typical challenges of manual sales order and purchase order processing are as follows.

Lack of Visibility Along the Order-to-Cash Chain

With manual order processing, it is difficult to find out the status of an order unless you are diligently in contact with the concerned staff to push the process forward.

Poor Validation

With manual effort, there are only so many checks you can perform with regard to order. For one, confirming the right shipping address for a particular order is time-consuming, especially when dealing with hundreds of orders monthly.

Poor Customer Re-engagement

How would you know if you’re dealing with a returning customer? Suppose you do not maintain a steady database of customers. In that case, it is difficult to access and retrieve information instantly, causing delays and even a failed chance at impressing the buyer a second time.

Because a purchase order represents buyer intent and engagement with your company, it is crucial that you have in place a purchase order processing system that enables best-in-class customer engagement and selling. Intelligent Process Automation (IPA) will help with that.

Consequences of Poor Order Processing

Order processing problems can result in several negative consequences for businesses. Some of the expected consequences include:

• Customer Dissatisfaction: Delayed or inaccurate order processing can lead to dissatisfied customers. Late deliveries, incorrect shipments, or missing items can result in customer complaints, negative reviews, and a damaged reputation for the business.
• Decreased Customer Loyalty: Poor order processing can erode customer loyalty. When customers have a negative experience with order fulfillment, they are less likely to repeat their purchases or recommend the business to others. This can result in lost sales and a decline in customer retention.
• Increased Operational Costs: Inefficient order processing can lead to increased operational costs. Errors in order fulfillment may require additional resources to rectify, such as reshipping products or handling customer returns. Manual processes and lack of automation can also lead to higher labor costs and increased processing time.
• Inventory Management Issues: Inaccurate order processing can disrupt inventory management. If orders are not processed in a timely manner or inventory levels are not properly updated, businesses may face stockouts or overstock situations. This can result in lost sales, increased storage costs, and inefficiencies in supply chain management.
• Impact on Cash Flow: Poor order processing can directly impact cash flow. Delays in order fulfillment can lead to delayed payment collection, affecting the business’s working capital. In addition, incorrect invoicing or billing errors can result in payment disputes or delayed payments from customers.
• Missed Business Opportunities: Inefficient order processing may cause missed sales opportunities. If orders are not processed quickly and accurately, customers may abandon their purchase or turn to competitors who can fulfill their orders more efficiently. This can result in lost revenue and market share for the business.

To mitigate these consequences, businesses should invest in robust order processing systems, streamline processes, implement automation tools, and prioritize accuracy and speed in fulfilling customer orders.

Key Areas to Focus on for Improving Order Processing

When it comes to improving order processing, there are several key areas that businesses should focus on. These areas include:

• Order Entry Accuracy: Ensuring accurate order entry is crucial to avoid errors and minimize the need for order corrections or returns. Implementing validation checks, standardized order forms, and training staff on accurate data entry can help improve order accuracy.
• Inventory Management: Efficient inventory management is essential for successful order processing. It involves maintaining optimal inventory levels, implementing real-time inventory tracking systems, and optimizing stock replenishment processes to avoid stockouts or overstocking.
• Streamlined Workflows: Streamlining order processing workflows can eliminate unnecessary steps, reduce bottlenecks, and improve overall efficiency. This can be achieved by mapping out the order fulfillment process, identifying areas for improvement, and implementing streamlined procedures.
• Automation: Leveraging automation technology can significantly improve order processing speed and accuracy. Automating tasks such as order entry, inventory updates, order status notifications, and invoice generation can free up time for staff to focus on more value-added activities.
• Effective Communication: Communication is vital throughout the order processing cycle. Clear and timely communication between departments involved in order fulfillment, such as sales, customer service, and warehouse, helps ensure smooth operations and customer satisfaction.
• Order Tracking and Visibility: Implementing order tracking systems that allow customers to monitor the status of their orders can reduce inquiries and increase customer satisfaction.
• Continuous Improvement: Regularly reviewing order processing performance, analyzing data, and seeking feedback from customers and employees can help identify areas for improvement. Implementing a culture of continuous improvement enables businesses to adapt and optimize their order processing operations over time.

By focusing on these critical areas, businesses can streamline their order processing operations, enhance customer satisfaction, and improve efficiency and profitability.

Intelligent Automation for Efficient Order Processing

Intelligent Automation of document-based processes streamlines order processing from the time you receive an order to final order fulfillment and receivables management. The ‘intelligence’ in an IPA platform replicates human actions to process sales and purchase orders and purchase orders in the hundreds and thousands. With little to no manual intervention, you are assured of accurate and instant data entry, validation, verification, approval, and export of purchase orders to your ERP system.

For every purchase order a company receives, the self-learning IPA solution OrderAction taps into its extensive database of built-in business logic to process the order. OrderAction recognizes the format and field placement containing order information on a typical sales and purchase order form and processes it based on pre-built logic — involves capturing essential line-item and header-footer details from the order and assigning it a built-in workflow based on business rules and requirements, including routing it for automatic validation for inventory check, customer details, etc. and verification.

With every new type of data that the Intelligent process automation solution OrderAction encounters, it uses machine learning to learn user actions performed to capture details from the order form the first time. OrderAction retrieves this knowledge the next time it encounters a similarly formatted order form and performs data capture and processing as a user would.

IPA’s self-learning technology helps reduce manual intervention progressively with every new order form, adding to the extensive database of built-in logic as well as ‘learned’ configuration — intelligent automation extends robotic process automation technology to unfamiliar, new documents, so companies will not have to worry about creating a new workflow for every new purchase order format. This enables order processing software to work with and execute vast and diverse purchase order forms.

Unattended sales order and purchase order processing saves companies significant time and costs, as this manufacturer will tell you, who saw a 66% improvement in order processing within months of deploying the technology.

Want to improve your order processing for better sales and cash flows? Talk to Artsyl.

FAQ

How can order processing be improved?

Improving order processing involves implementing effective strategies and utilizing efficient systems. Here are some frequently asked questions about improving order processing:

How can automation help improve order processing?

Automation can streamline order processing by reducing manual errors, improving speed and efficiency, and enhancing accuracy. Automated systems can handle tasks such as order entry, inventory updates, and order status notifications.

What role does inventory management play in order processing?

Effective inventory management ensures that products are available for order fulfillment. It involves accurately tracking inventory levels, timely replenishment, and real-time visibility into stock availability.

How can communication be improved in the order processing workflow?

Clear and timely communication between different departments involved in order processing is crucial. Utilizing centralized communication tools, implementing order management systems, and establishing effective communication channels can improve coordination and reduce errors.

What are the benefits of integrating order processing systems with other business systems?

Integration with other business systems, such as inventory management, customer relationship management (CRM), and accounting software, allows for seamless data flow, improved order accuracy, and better visibility into customer information and order history.

How can order tracking and visibility be enhanced?

Providing customers real-time order tracking information through online portals or automated notifications can enhance customer satisfaction. Internally, implementing order tracking systems can improve visibility, allowing businesses to manage order status and address any issues promptly and proactively.

What are some best practices for improving order processing efficiency?

Best practices include standardizing order processing workflows, implementing quality control measures, training employees, utilizing technology solutions, conducting regular audits, and continuously analyzing and optimizing processes.