A Guide to Sales Order Automation

Sales orders are a vital part of running a business — they outline the terms and conditions of the sale and enable companies to keep track of inventory and production costs. They’re also important for maintaining accurate accounting records come tax season.

For businesses looking to better manage their sales orders, this guide will help you improve efficiency and accuracy. From understanding what’s in a sales order, to streamlining processes, we cover the essentials you need to know for effective order management.

What is a sales order?

A sales order is an official document that’s created when a customer places an order for goods or services from a business and outlines the details of the transaction. The sales order also serves as a transaction record for both parties involved.

In particular, sales orders establish legally binding contracts that cover various aspects of the sales process, including:

  • Order effective date
  • Company name and contact information
  • Customer billing information
  • Customer shipping information
  • Price before taxes/VAT
  • Delivery/freight/shipping charges
  • Total price after taxes/VAT
  • Signatures
  • Product details
  • Pricing information
  • Shipping terms
  • Other essential terms and conditions

Why are sales orders important?

Sales orders play a crucial role in the sales process because they help to ensure both parties are clear on the details of the transaction. This document helps to prevent misunderstandings by laying out all of the important information in a clear and concise way.

Some of the benefits of using sales orders include the following:

  • Create efficiency
  • Boost sales order processing
  • Improve the sales process and customer relationship
  • Establish clear expectations for both buyers and sellers
  • Reduce the chances of misunderstandings or disputes
  • Help to track sales performance over time
  • Provide important logistical and financial data
  • Identify areas for improvement

Additionally, sales orders can be used to track performance over time. By reviewing past orders, businesses can get valuable information about their customers, such as what types of products they’re buying and how often. This data can be used to inform marketing strategies and product development decisions.

How can you create a sales order?

Now that you know what a sales order is and why it’s important, let’s take a look at how to create one. There are a few key elements every sales order should include:

  • The date of the sale
  • The name and contact information for both the customer and the seller
  • A description of the goods or services being ordered
  • The number of goods or services being ordered
  • The price of each unit
  • The total price of the order
  • The payment terms
  • The delivery details

Creating a sales order is simple — just include all the necessary information listed above, and you’re good to go! However, it’s important to remember this document should be created before any goods or services are exchanged. Once both parties have signed the sales order, it becomes a binding contract.

How do sales orders and purchase orders work together?

Within the order management lifecycle, there are two main components: procure-to-pay and order-to-cash. A purchase order (PO) is part of procure-to-pay, and a sales order is part of order-to-cash systems.

A purchase order is a type of document used to request goods or services from a seller. The customer provides the vendor with a list of the items they wish to purchase, along with descriptions and quantities, and the vendor agrees to provide these items at a specified price.

A sales order is a type of document used by vendors that sell products or services. The vendor receives the purchase order from the customer and, after processing it, returns a sales order to the customer to confirm the price, inventory level, and delivery estimates.

Due to these differences, purchase orders and sales orders serve different purposes within businesses. For example, the following diagram illustrates how customers, vendors, and products work in the sales cycle.

Sales order cycle

How can Rossum help automate sales order processing?

Manually processing orders is slow and tedious, as well as prone to human error. Typos and incorrect information from manual data entry can lead to expensive mistakes and lengthy delays that hurt customer relationships and damage brand reputation.

Fortunately, there’s a faster and more accurate way to handle your sales orders — intelligent document processing (IDP). Rossum’s AI-enabled document processing platform can automate sales order processing with reliable precision and high-speed performance.

IDP uses advanced machine learning to detect and understand information, classify documents, and automate various tasks, such as pre-processing, data capture, validation, and post-processing. Combined with seamless integrations with your existing systems, you can maximize the efficiency and accuracy of your sales order process.

Head to our eBook Automating Sales Orders: How IDP Can Help to see what this innovative solution can do for your business, from reducing costs and errors to generating more revenue.

Accelerate your sales order processing

Transform how your sales team processes orders while enhancing customer experiences. Leverage fast and accurate AI automation to drive more revenue.