What is sales order processing?
Sales order processing is everything between a customer's order arriving and the goods being invoiced: checking the order, acknowledging it, entering it in your system, scheduling the work, despatching and invoicing. In a make-to-order business it usually starts with a purchase order against your quotation.
What is a sales order?
A sales order is your own record of what a customer has ordered: the parts, quantities, prices, dates and delivery details, entered in your ERP or MRP system. The customer's purchase order is their document. The sales order is yours, built from it and checked against your quote.
What are the steps in sales order processing?
There are eight steps from purchase order to invoice. The first three matter most, because a mistake caught before the order is acknowledged costs a phone call, and the same mistake found at despatch costs a remake or a credit note.
- 01Receive the purchase order and log it against the quotation it refers to.
- 02Check it against your quotation, line by line.
- 03Agree any differences with the customer before going further.
- 04Send an order acknowledgement confirming what you'll supply and when.
- 05Enter the sales order in your ERP or MRP system.
- 06Raise the works order and schedule it with production.
- 07Despatch with a delivery note and any certificates the order asks for.
- 08Invoice against the order, on the agreed payment terms.
What should you check when a purchase order arrives?
Check it line by line against the quotation it refers to: part numbers, drawing revisions, quantities, prices, delivery dates and addresses, and any terms printed on it. If anything differs, sort it out with the customer before you acknowledge the order, because the acknowledgement confirms what you'll supply.
What is an order acknowledgement?
An order acknowledgement is your written confirmation that you've received a customer's order and will supply it: the parts, quantities, prices, delivery date and the terms that apply. Send it promptly, once the order matches your quote or the differences are agreed.
Where does sales order processing go wrong?
At the hand-offs: a purchase order that quotes an old revision or price, an order keyed in by hand with a typo, an acknowledgement sent before anyone compared it with the quote, or a delivery date promised without asking production. Each is cheap to catch at entry and expensive to find at despatch.
Can AI help with order entry?
Yes, with the reading and checking. AI can read a purchase order, compare every line with your quotation, list the differences and draft the sales order for your system. A person reviews the differences and approves the order before it goes in.
Give it
- The purchase order
- The quotation it refers to
- Your rules for what must match
A person checks
- Every difference it lists
- The delivery date with production
- Which terms apply before you acknowledge