What is a Sales Order and why use it?

19 September 2022

Sales orders may be something you never thought you would voluntarily read a blog post about, but boy are we ready to rock your world!

Okay, let’s be honest here: There’s no surefire way to make the topic of sales orders exciting, but there are definitely some undeniable reasons for why you should be using them in your product-based business! 

Is it hard to imagine incorporating more forms and steps? Does it seem overwhelming to alter/add to your current process? These concerns are all understandable! We totally get it, and  we’re here to show why a little extra virtual paperwork might not be such a bad thing for your biz!

Let’s talk basics

All the terms within a sales process can get repetitive and confusing. So what is the difference between these terms you hear all the time? Well, let’s start with the first part of most sales processes: the quote.

A quote is the estimate a potential buyer/customer would request from a seller. In return, the seller creates a quote consisting of prices and other pertinent details about a potential purchase. 

Next, you would have a purchase order (if the customer decides to make the purchase based on the quote). A purchase order is an official document and details what the customer plans to buy from the vendor. 

Following the customer’s intent to buy, a sales order comes into play. A sales order will accept conditions laid out in the purchase order and reflect other details about the transaction. A sales order will contain items like delivery information, timelines, and payment method. It also includes prices and quantities. 

To sum up the whole process, an invoice is sent. Invoices reflect information confirmed in the sales order, but focus more on collecting payment from the buyer. 

sales order

Benefits of incorporating sales orders

Everyone benefits

For starters, sales orders are the only piece mentioned above that reflect the interests of both parties involved. A quote is controlled by the seller. A purchase order is controlled by the buyer. The invoice is for the seller’s benefit (gotta get that cash!). 

A sales order, however, represents what both the buyer and seller need from a purchase; it reflects both sides of a sale. 

Does the sales order accurately line up with the purchase order? Does the seller have the inventory needed to ship immediately? A sales order keeps both parties in the loop and ensures a successful transaction. 

Stop fearing those audits

Sales orders can give you some extra beneficial data for reference down the road. No one wants to be audited– but it’s just a part of being a business owner. Wouldn’t it be nice to have a few extra bits of information for peace of mind and an easier process? Wouldn’t it be convenient to have a better trail with less likelihood of getting lost combing through years of sales? Sales orders give you more precise documentation that can really help with compliance and save you major hassles. 

Grow that business

Back to the less scary stuff: this extra data can even help your business grow and succeed! Yes, you read that right, a simple sales order is better for your business! 

Sales orders can help you better track inventory and make helpful projections about future needs. 

For instance, if you have a frequent customer that keeps making multiple purchases within a short time frame, you can use sales order data to optimize and properly manage your inventory process. Know when to order items and know when to hold them for customers. Not to mention, you can create multiple sales orders for this customer and only send out one invoice! Save yourself some time and effort, while continuing to collect useful information.

sales order

You’re not alone

Aw, did that sentiment give you the warm fuzzies? Well, we aren’t lying: you have the support you need to run a successful business! So if you are overwhelmed about dealing with this sales order stuff alone, have no fear- Zoho Books is here!

No, but seriously, Zoho Books can truly guide you through a potentially confusing process. Not sure how to even create a sales order? Zoho has templates. Have multiple brands that are getting hard to juggle? Zoho Books can juggle them for you! You can personalize your sales order and create a separate style for each of your brands.

sales order

Zoho Books also makes it super simple to convert a quote into sales order all in one place. Then once it’s time to collect payment, easily convert it to an invoice! All it takes is one click from a drop down menu.

Only have the inventory for part of the order? Zoho Books can help you send a partial invoice so you can go ahead and send the stock you have! Make the customer feel appreciated and build a trusting relationship by not making them wait forever for their order!

Zoho Books even lets you switch sales orders to purchase orders so you can buy that inventory you’re missing! And like with all things Zoho, you get valuable insights and information as you go. Plus, you can easily communicate anything you want to your sales teams and coworkers. 

The takeaway

Now that you understand why sales orders are important, we hope you feel better about incorporating them into your business! Make that sale and keep those customers coming back by continually improving your sales processes! 

Zoho Books is a great way to manage this crucial aspect of your business, and we can’t wait to hear how some simple changes will benefit your biz!

Want to find out how we can help you? Book a FREE consultation!

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