The traditional wholesale sales order processing model has several dangerous blockage points that can eat up profits. While the cycle of “order to cash” has been improved by ERP vendors and accounting and finance professionals who engage the process once the order hits the ERP, the order side of the cycle is where good money can be saved today. Recently we heard from a sales manager from one of our brands that “An order delayed is cash flow delayed.” It got us thinking a little more about the comparison between paper and digital order writing, what’s causing delays in cash flows, and what can be done to speed things up.

Writing the Order: Paper vs. Electronic

Compare two wholesale customer order writing scenarios; one paper, the other – electronic sales order automation:

Paper ordering: Order submission delays

Orders written on paper might be partially created or recreated three or four times before it’s ready for signature. Not only is it a waste of time and labor – but it introduces the opportunity for errors. In scenarios where companies are (still) using fax, blurry, illegible text means an even higher chance for errors and the need for electronic recreation for the ERP system. Plus, paper just doesn’t scale. You’ve probably experienced the joy of hand writing hundreds of manual orders at a trade show to then go back to your hotel or office to re-create them. A major downside to paper writing is the time it takes to advance to the next step of the order process. Handwritten orders may be delayed from advancing to fulfillment based on a rep’s lack of access to a fax machine, the need for a rep to collect and submit orders after a business trip, or because they’re put into queue for manual re-entry by a customer service team.

Electronic ordering: Instant order submission

With electronic order taking, the order is written using software on a mobile device, tablet, or computer, perhaps with a bar-code reader or an integrated catalog, and the customer can immediately approve and sign it. Since the electronic order software often interfaces directly with the rep’s ERP, the rep can confirm inventory availability and delivery dates. The approved order is transmitted, and fulfillment starts that day. The customer receives an email order confirmation and a ship notice as soon minutes or hours from the sales order being placed.

Sales Order Automation Benefits

Productivity

Each step that can be automated or eliminated shaves time off the turnaround from order to cash. The longer it takes to ship, the longer it takes the buyer to pay. Fix the order process and you bring the ship, invoice and collections dates closer.

Labor

Any labor savings from automation go straight to the bottom line, either because you can eliminate low-value work that is no longer needed, or redeploy people to more value-added tasks, like providing exceptional customer service. We recently talked with an IT person who was responsible for the order-entry process. Through automation, he saved about 32 man-hours a week – nearly an FTE. Happy salespeople and customer service reps who don’t have to waste time re-entering orders have better morale.

Time

Speed is key. A delay can move cash receipts from orders into the next month or the next quarter, affecting both sales rep commissions and your cash position. For the rep, it can have implications anywhere from missing their quota, to delaying commission or damaging rapport with their customers. Automatic sync of orders from the field to home base is critical – it drastically reduces the amount of time between order placing and fulfillment.

Defending your shelf space

Once you’re established with a retailer, the last thing you want is for your allocated shelf space to be empty. This means not only loss of potential sales, but that another brand or product can replace you. Get your products on their shelves quickly to turn over more cash and keep the space for your products. Better yet, order fulfillment speed can be perceived as competitive advantage to your customers who value well-stocked, well-merchandised shelves, helping you steal shelf space from brands who let their shelf allocation languish. In cases where you aren’t able to get to an in-person sales appointment before product starts to run out, you can always check in with your accounts by sending an “interactive quote” – prepare the re-order, shoot it over via email, have them confirm with one-click online.

Customer Loyalty

It’s far less expensive to keep a customer than to acquire a new one. When you make things easier for the customer, they’ll be more likely to repeat doing business with you. Especially with smaller buyers, where their bandwidth is at a premium, they will likely appreciate an automated ordering process that shows them you care about their time. Sales order automation means that in some cases, your customers can receive an order shipment the day after they place it. You shouldn’t underestimate the impact of these positive customer experiences on retention.

What’s next?

We recommend doing a pre-automation audit of your current processes to determine exactly what steps are necessary, what can be streamlined, and what can be eliminated. If you find yourself running into the familiar excuse of ‘because that’s the way we’ve always done it,’ when you evaluate your current order-writing process, it might be time to advocate for why in this case, legacy doesn’t add value to the process. Once you’ve examined the process and found the areas for improvement, hopefully you’ll have the buy-in you need to use automation to speed your time to cash.

Seen a major overhaul in process translate to some serious savings? Let us know about it in the comments below!