Every business process error comes at a cost. Failing to offer great support can disenchant customers and destroy hard-won loyalty, and a poor online experience can turn them away in droves. A messed-up sales order is a sure-fire way to erode customer happiness – and drives up operational costs.
When you issue a sales order, usually as a response to a purchase order, it confirms the transaction between your business and your customer. You may choose to send a copy of the sales order to your customer or just use it as an internal document. Regardless, it must be accurate. It should correctly detail the customer’s name and delivery address, product codes and quantity ordered, the pricing, when it must be delivered, and more. It’s also used as the basis for the invoice you will send out – so the sales order and invoice should reconcile perfectly.
Let’s start with invoicing. An incorrect sales order can lead to billing and payment issues with your customers’ purchasing managers, invoice approvers and accounts payables teams grappling with sorting out duplicate invoicing and overcharging.
Generating inconsistent invoices based on a sales order due to a lack of a centralised source of the truth is another common problem. This can result in orders being sent to the wrong address (when a customer has several addresses listed) or invoices addressed to the wrong person (hey, they left last year). That inconsistency can also boil over to product descriptions, codes, and pricing – causing problems on both your and the customers’ side of the transaction.
If your team manually converts purchase orders to sales orders, there’s always room for error. It’s generally accepted (but not quantified) that the typical error rate in manual data entry is about 1% (although some offer 30% as a more accurate figure). However, based on the more conservative figure, the potential is that for every 100 keystrokes, one is wrong. That could be a product code, a quantity, a description, a delivery option or even the customer’s name. Any of which will have a negative effect when it comes to customer satisfaction.
Both missed communications and overlooked purchase orders are also common when there is a reliance on humans, resulting in orders not being updated, cancelled or fulfilled.
The impact of an incorrectly picked sales order can be larger than just that one mistake – it can significantly impact customer satisfaction and retention. They may have depended on the stock items for a ready-to-launch marketing campaign, to fulfil urgent backorders, or to gain a competitive advantage.
As well as being highly annoying to your customer who must ensure the incorrect stock is repacked or relabelled to return, and the time taken for your warehouse and shipping bay to manage the pickup, the cost to retrieve an incorrect order and ship it back to your warehouse or store comes straight off your bottom line. Plus, it also must be sorted on arrival and returned to the right place and correctly documented as stock in hand, or you will experience discrepancies in inventory.
An incorrect order not only generates a return cost but the expense of updating the sales order and picking list, approving and issuing a credit, picking and packing the order - again, and wearing the cost of sending the order out - again. So, the operational expense to deliver one order has tripled – and you are paying for two-thirds of it out of your pocket, and your warehouse handling and administrative costs have gone up.
As well as physically ‘making good’ (if that’s acceptable to the customer), the time to sort out an incorrect sales order includes fielding and troubleshooting the problem and following through with updated paperwork and case notes. Added to this is the time needed for your sales team to pour oil on troubled waters, smooth out a bumpy situation, and ensure that the wrong sales order doesn’t shorten the lifetime value of your customer to the business.
Automating your sales process allows customer orders to be managed seamlessly regardless of where the order originated. Here are some of the benefits you can expect:
Sales order automation improves customer relationships, relieves your staff from tedious manual data entry and associated tasks, cuts down the delivery and operational costs of processing returns, and accelerates the payment cycle. There’s a lot to love.
Copyright © 2023 Redmap