John Hall, a senior contributor at Forbes writes, “If You’re Serious About Scaling Your Business, Get Serious About Sales Order Automation”.
By now, you, as an entrepreneur, might have a glimpse of what sales order automation is all about. However, have you truly grasped how it can benefit your business operations?
In business, it is great to think big, plan big. But it is equally important to care for the routine repetitive tasks (like, sales orders!) that affects your customer service directly. (Because let’s face it when you are handling a sales order, you are actually handling your customer.)
Manual processes may turn what should be a smooth and satisfying transaction into a source of frustration, ultimately impacting your customer’s perception of your service. Hence, if your current manual processes are starting to feel like a bottleneck, don’t worry, there’s a better way- sales order automation.
This blog post identifies the 5 key benefits of sales order automation for businesses.
Let’s dive in.
Table of Contents
What is a Sales Order?
A sales order contains information about the sale including the quality, quantity, and price of any services or products sold or exchanged. It is a commercial document, which is prepared by a seller and then issued to a customer to confirm the sales of products and services involved in a given transaction.
The sales order may also include other details such as delivery address, date of issuance, payment method, and time. It helps to keep a record of the sales made and products and services sold. This can help companies keep a track of the goods they have sold and when to restock their inventory. Sales orders are most commonly used by manufacturers, retailers, wholesalers, and suppliers.
Sales Order vs. Invoice
Sales order and invoice are not the same thing as some might think. A sales order confirms the sale, informing the vendor to start assembling, packaging and preparing the products and/or services that a customer has requested in a purchase order. Invoice on the other hand specifies the amount of money a customer owes a supplier or retailer for the products and/or services bought or exchanged. They are made once a sales order is confirmed, using the details in the sales order such as how, when and how much the buyers are supposed to pay for the products and services they have requested. Both, however, are generated from a vendor and contain details of a specific sale.
Why Are Sales Orders Important?
Imagine you are getting many orders from customers for your products and services. Without sales orders, you will just be informing the manufacturer to prepare the goods and services that the customer has requested. This might lead to losing track of how many goods are supposed to be manufactured, which may cause unfulfilled orders and missing deadlines, resulting in unhappy customers. A sales order is important because it can help you keep a track of your inventory, your sales, and the amount of services or products you need ready to meet customer orders. Sales orders can help your business to keep your inventory updated, stay on top of what you have on backorder, and what you may need to purchase from your distributors.
Sales orders also help you evaluate certain terms and conditions to fulfill orders and if the need arises, you can consult your lawyer who can clarify the conditions to you.
Here’s an example.
Imagine you own a SME selling bakery goods. A large company sends you a purchase order for 40 cakes, specifying the flavor, price and topping.
By agreeing to this purchase order, you are agreeing to deliver 40 cakes at the specified price, flavor and other specifications that may be mentioned in the agreement.
If you are uncertain about any terms in the agreement, you can consult your lawyer to clear them out. This can prevent future setbacks among the buyers and sellers.
Sales orders also help mitigate the risk of material misstatement in a company’s financial reporting. Material misstatement is a kind of error in a financial statement that can lead to negative financial outcomes such as making an important decision based on incorrect financial data.
Further, material misstatements in reporting inventory balances can have some very real consequences. For instance, misstating ending inventory can inflate or reduce your company’s profits, and as you can assume, neither of those outcomes looks good if you’re being audited. That’s why it’s absolutely crucial to maintain accurate records of your sales orders to catch any potential material misstatement during an internal audit.
Relying on misstatements can result in serious consequences for your company. For instance, misstating financial reports may make you look bad if you are being audited. Thus, it is imperative that you keep an accurate and transparent record of your sales order to ensure streamlined workflows and meet customer expectations.
Key Benefits of Sales Order Automation
Following we will discuss the five benefits of automating your sales orders:
1- Enhanced Accuracy
Sales order processes are usually carried out using specific sales order automation software that significantly reduces human-based errors. Moreover, automating sales orders can help you focus on the development of core areas of your business. Sales order automation can also help you identify and predict future discrepancies and act accordingly to mitigate them.
2- Increased Transparency
Increased transparency allows for more accountability in sales order processes. This helps keep a track of how your employees are carrying out their designated tasks and if you want to help them reprioritize their work duties.
3- Higher Customer Satisfaction
Since sales order automation keeps you updated with your customer orders, there is less chance for you to miss out on customer orders. This also helps you fulfill customer orders on time that ultimately results in satisfied and returning customers. Moreover, automated sales orders are more detailed and transparent than manual sales orders. This shows your customers that you are giving them a detailed record of where and how they are spending their money, that can help build trust and lasting relationships.
4- Expedited order processing and feedback
With the increasing consumer demands and service delivery, businesses are adapting to automation so they do not have to manually enter, process and complete orders again and again. This can also be annoying for the customers as they do not like waiting too much. Sales order automation streamlines this whole process, ensuring quicker responses and smoother deliveries.
5- Reduce Accounting Costs
With the increasing consumer demands and the need to generate more and more sales orders, it can be hard for companies to hire more and more employees for these repetitive tasks. The hiring and training costs would simply get quite challenging to afford. This is where sales order automation comes in, where you can have two or three resources monitor the whole automated process without having to hire a large number of resources to keep up with the number of generating sales orders. Moreover, automatic integration between order processing software and your ERP system can reduce the time necessary for manual entry.
Outsource your Sales Orders to Expertise Accelerated and Cut Operating Costs.
By leveraging the skills of highly experienced accountants at EA, you can automate your sales order processes and reinvest your savings in strategic areas of your business. Check out our testimonials sections to see what our clients have to say about us!
