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What is Sales Order Processing & Why Optimize it?

If you are in any business that sells goods, you know the value of sales order processing. It is a vital workflow that can make you profitable really soon by helping you cut costs and delight customers. So what is exactly sales processing, and why should you optimize it? Let’s take a deep dive into the topic and find out.

Sales order processing or order management is the step by step process that involves everything from the customer placing the order, finishing the payment, and then finally the order being fulfilled with delivery. Sales order processing details each phase of the purchase, including financial transactions and all information related to logistics. A typical sales order flow is a 5 step process.

1. Receiving the Order

Depending on what sales channels are offered by you, your customers can place an order. This could be through phone, mobile app, or online through your website. A typical sales order should include…

  • Requested Products

  • Quantity

  • Shipping Details

2. Generating Sales Order

If your processes are automated through software, the sales order would be generated in step 1 itself. If your stock levels are electronically managed and kept up to date at a central database, it can be integrated with a sales ordering system called an OMS or order management system. In the absence of something such as an electronic purchase order system, an employee manually raises a sales order upon receiving a purchase and checking stocks for availability.

3. Picking, Sorting, and Packing

The next step is to get the logistics process on the way. The warehouse staff must pick, sort and pack the item that has to be shipped. Bar code scanners can increase the speed of delivery in such cases. The sorting process involves sorting the items according to delivery location, which is done in batches and zones and then further segregated to individual orders of customers. Finally, the orders are packed and labelled for shipping.

4. Shipping

The next part of the process is to ship the product to the customer. After the picking, sorting, and packing process, the shipment is sent to an outbound logistics partner. Depending on the customer’s preference, the shipment is sent either in bulk or individually. Collecting shipments and then sending them all at once may decrease delivery time, whereas sending out partial shipments may increase costs. So there is a fine balance that needs to be struck in the process.

5. Invoicing

Invoicing basically means creating the bill of your sale. It usually happens at the first process of the pipeline if a payment is made online itself. If not, an invoice is generated so that your company receives payment. An invoice can be generated manually and shipped with the package, or be electronically generated and be emailed to the customer.

There are many ways of optimizing a sales order process. The best of them is to use technology and automate the process as much as possible. It includes using software and hardware to keep track of all SKUs from the starting to the end of the process. There are plenty of reasons to look for optimizing solutions for your sales order processing.

Fewer Errors: Automating various process elements like data entry, picking, invoicing etc. means that you will get rid of common human errors like typos, inputting the wrong numbers, misplacing the right items, etc would drastically reduce.

Faster Fulfillment: The end customer’s satisfaction ultimately builds your brand’s value. The customer wants nothing more than on-time delivery and a great product. The delivery part can be greatly taken care of by automating your processes. It would take much less time to process things and fulfill the order sooner.

Lower Costs: Software management is much cheaper than hiring more people to do the same jobs with lesser efficiency. On top of that, when fulfillment is faster, costs do cut down. Also, when there are fewer errors, there are lesser chances of returns.

Easily Manageable: A digital and automated process gives you a streamlined structure that makes sales orders easily executable. All the complex calculations, data entry, and automated generation of invoices etc. take away most of the scope of all complexity involved.

Sales order processing, and other automated services can be tricky to explore by yourself. This is where a supply chain industry professional such as ARK India comes into play. We have years of expertise in all things supply chain management! Contact us today to get a quote and know more about our services.