Chapter 5: Sales Order Processing

Sales orders capture demands for the firm s products and services. Sales orders comprise a key element in two larger contexts: the sales and operations (S&OP) game plan driving supply order management and customer service across the customer relationship life cycle. The sales order often represents one step in the customer relationship, and may involve collaborative work in the sales channel as well as the supply chain. Only a subset of customer information directly relates to sales order processing, while other customer information such as contacts relates to other steps in the customer relationship.

Distributors and manufacturers focus on sales orders for material items. These orders may originate from one or more order streams, such as direct customer communication with order entry personnel, telemarketing, sales representatives, Web-placed orders, and electronically transmitted customer schedules. Variations in sales orders can be expressed for individual line items. However, the basic structure of a sales order remains the same regardless of order stream and variation, and sales orders for material items provide the organizing focus for further explanation.

Customer Information

Each customer is defined in a customer master file by a unique identifier. Sold-to and bill-to customers require unique identifiers. The customer master file defines information for sales order processing and other purposes such as sales analysis and accounting. Several data elements have particular significance to sales order management

• Ship-to Addresses. A sold-to customer can have one or more ship-to addresses for shipment purposes. Additional shipping information can be defined for each ship-to address, such as the preferred ship-from site and the preferred shipping agent and service type. These values act as defaults in a sales order for the customer s ship-to address.

• Bill-to Customer . Each customer can optionally have a designated bill-to customer that acts as a default on sales orders, where the bill-to customer determines applicable pricing and discounts .

• Attributes Related to Pricing and Discounts . A customer price group and discount group can be used for defining item prices and discounts, respectively. Each customer can also have invoice discounts and service charges related to the total value of a sales order.

• Attributes Related to G/L Account Number Assignment . General ledger (G/L) account number assignment reflects the customer posting group and business posting group assigned to a customer. A customer posting group defines G/L account numbers such as receivables and service charges. A business posting group works in combination with an item s product posting group to define G/L account numbers such as sales, cost of sales, and discounts. These attributes also serve sales analysis purposes.

• Analytic Dimensions for a Customer . The analytic dimensions assigned to a customer provide a means to analyze sales by customer type. They can be used in conjunction with analytic dimensions assigned to other entities, such as items, sales campaigns , and sales people, to provide multidimensional sales analyses.

• Customer Hold Status. A customer hold status (termed a blocked status ) can prevent all transactions from being recorded, or only prevent shipments or payments to the customer Customer-Related Comments. Comments are generally used for internal purposes, and can be defined with multiple lines of free-form text. Each line may be assigned a date and a user -defined code to sort and filter comments, such as comments related to accounting or sales. Biztalk Partner Information . The ability to exchange documents electronically requires identification of the customer as a Biztalk partner, the types of authorized documents, and rules for exchanging information. Outbound documents include sales order confirmations , shipment notifications, and sales quotes; inbound documents include sales orders and requests for a sales quote.

Summarized information about a customer can be viewed in several ways. A customer s statistics include month-to-date (MTD) and year-to-date (YTD) values for sales, profits, invoices, and payments. The total value of sales and profits can be viewed across time, such as monthly or quarterly time increments . Entry statistics for a customer include MTD and YTD transaction counts (such as the number of invoices, payments, and credit memos), as well as calculations for average collection period and largest balance. Transaction detail can also be viewed by type of sales document, such as outstanding quotes, sales orders, and return orders.