A customer order is a formal order from the customer which provides details of the amount and due date for a customer’s requirement of products.
It is a written document specifying the orders made by the customer. It states the amount of money to be paid, the due date on which the money can be expected, and also the quantity of the product being delivered.
It is different from the sales order.
A customer order enlists detailed instructions about the finished goods as ordered by the buyer. This removes all confusion and allows the organization to provide strictly as per the buyer’s needs.
In the world of business, there is no scope for carelessness. Thousands can be lost over a misunderstanding or lack of far-sightedness. Here, the customer order is like a legal document that serves as binding evidence. There is no reverting back a customer order, and it cannot be denied either. It becomes the proof of transaction history between the buyer and seller, once a customer order has been accepted by the company, hence also known as ‘Transaction documents’.
It is now their job to provide for the articles mentioned in the order, in the exact condition and following the exact instructions demanded in the customer order.
The customer order is also added to the record book of all transactions done by a company. This can also be used to predict the market demand of the company. This helps in developing proper inventory management techniques.
Steps that complete the customer order processing
- Customer order: At this stage, the customer browses through the products enlisted by the company, and upon liking, one places an order. The customer might also put in an order to be custom made, in which case the detailed description provided by the customer is to be regarded with precision.
- Acceptance of order: The customer order needs to be accepted by the company to enter into a transactional relationship. This would allow the customer to know a few things like delivery date and shipment details.
- Delivery: Here the company organizes all items as per instructions and manages all packaging and transfer-related issues with expertise. Now it is time to deliver the shipment to the proper location on time. An on-time delivery helps in increasing the customer service level and achieves the trust of the customer which is also very important.
- Payment: The payment might be immediately followed by the shipment or it might have been done in advance. In either case, no more negotiation can be done, and the customer must pay up the entire amount mentioned in the customer order.
- Service: Some organizations do not cut off all ties with the customer after selling the product, rather they provide servicing and maintenance of the sold products for a period of maybe 6 months, 1 year or till the guarantee period.
What is customer order management?
This is the procedure that can be followed to keep track of all the customer orders by filling up a customer order form.
It helps in tracking their delivery time, and whether the shipment has reached its destination. This also keeps a tab on the transaction history of the company that helps predict a lot about the company’s successful functioning.
Targets of management
- Tracking new orders and deliveries each month.
- Creating order acknowledgments that can be sent to the customers.
- Tracking old orders, and keeping track of the unfulfilled orders so as to clear out the backlogs. It is necessary for maintaining a high customer service level.
Hence, it is extremely vital for a company to maintain its customer orders sincerely and give high priority to the open orders.