Wholesale ERP and Sales Order Management: What You Should Know

Wholesale ERP solutions focus on inventory and financials, while sales order management is front-line technology that powers customer conversations.

Glen Coates
September 19, 2014

If you’re running a wholesale business today, the one piece of software that you are guaranteed to have is an ERP (aka, your accounting system).  Whether it’s something basic like Quickbooks or a behemoth like SAP, if you don’t have one, you cannot survive. Ask a business owner what they “run their business on”, and they’ll give you the name of their ERP. ERPs are fundamentally about one thing: ledgers.  Remember that Accounting 101 class you took in college?  When they made you fill out those tables of debits and credits and balance them out? That’s a ledger, and an ERP is basically a huge digital interface to those crusty old books.

Wholesale ERP Software: A Factual Representation of Your Business

In other words, an ERP is basically a huge collection of hard facts, recorded in perpetuity, about financial or inventory events.  A customer was invoiced on this date for that amount.  This unit of stock was received at that warehouse. Cash was received on this date to settle that invoice.  No ambiguity. Unfortunately, a huge portion of real business is not set in stone.  It’s live conversations between your customer-facing staff about transactions that might happen in the future. Enter the sales order.

Sales Order Management Software: Technology that Powers Conversations with Your Customers

Unlike an invoice, which is the core document of an ERP, a sales order is not a hard fact. It hasn’t happened yet. It’s a conversation about a transaction between your business and a customer that will most likely happen, but it could change in any number of ways before it actually happens and becomes an invoice. Here’s the problem.  ERPs see sales orders as second-class citizens to invoices.  To an ERP, they’re the annoying period of ambiguity before things get set in stone.  They’re the crying baby at the dinner table that needs to be tolerated until it goes to sleep and the adults can talk. Most ERPs provide a user-unfriendly-interface for sales orders that looks exactly like the one for invoices (sorry, not everyone who works at a brand is an accountant, and not everyone thinks an invoice data-entry interface is easy to use).  Some (e.g. Quickbooks Online) do not provide sales orders at all. Unfortunately for ERPs, sales orders are where your business actually happens.  Sales orders are the living documents that represent the interactions between your customer-facing staff (e.g. sales reps and customer service people) and your customers.  Invoices are the domain of your finance people, and as crucial as they are, finance is not the front-line of your business (or at least, I hope it’s not). In the consumer world, the innovation around sales order management is incredible.  Shopify provides an amazing experience for a consumer to place a sales order on the web (aka eCommerce).  Square provides an amazing experience for ringing up sales orders for in-store shoppers (aka Point-of-Sale).  Neither experience looks or feels anything like an invoice in QuickBooks or SAP. Sales orders are not full stops.  They are question marks.  Your ability to provide an amazing customer experience around turning those question marks into full stops is what differentiates you from your competition. You know that story about Jet Blue where the CEO says that they were able to innovate to get boarding times down to 15 minutes because they didn’t know that they couldn’t? When I was running operations for a brand in California back in 2008, I was looking for the software to "run our business” and ended up guiding our entire vendor evaluation process towards pure sales order management solutions like iCongo, because I didn’t know what ERP was or that I needed one.  Every time I saw an ERP it seemed so far away from what really drove our business, which was excellence in handling sales orders and serving our customers. I eventually chose an ERP because we did need one on our backend, but I was always left with this nagging feeling that I’d left something behind, that the focus had slipped from the most important thing: the technology that powers our most important conversations with our customers. That technology is sales order management.