The DriveSales™ | Sales Orders: What they are compared to Purchase Orders & Invoices?
The most exciting moment in any salesperson’s day is probably when he is able to successfully close a deal. The rush of excitement and the promise of deliverables is on the high.
However, at the same time, you should be able to answer a very important question — What are your as well as your customer’s expectations regarding the remaining sales process and how to smoothly carry out the process?
It is vital that you have an answer to this question and the answer to this question will stem out of your brain if you are aware of a vital sales document — ‘the sales order’.
A sales order is essentially a commercial document that is presented to the customer by the seller. It confirms the sales of products or services of a particular transaction. The document comprises all the details regarding the sale such as quality, quantity, price of the product or service, etc.
Moreover, it contains some other information as well like delivery date, delivery address, payment mode, and so on. A sales order helps a vendor to keep a record of all the transactions and thus, as a whole, it helps companies to keep a track record of all the orders and deals they engage in.
Sales Order vs Purchase Order:
Before we deep dive into the technicalities, you need to understand what a purchase order is.
A purchase order is usually an official document that confirms a buyer’s intent to purchase a particular product(s) or service(s) from a vendor.
A purchase order is a buyer-issued document. It includes vital information such as prices, quantities, delivery timelines, etc. After a vendor receives and accepts the terms of the purchase order document, the sales order document is ready to be created on the basis of the details in the PO.
Understand that sales orders and purchase orders are generally interconnected. The vital difference between the two boils down to the fact of who generates and receives the document.
A purchase order is issued by the client to the vendor and it lays the terms of the proposed sale. A sales order is issued by the seller to the prospect, and essentially confirms the seller’s acceptance of the terms of the products and their delivery.
Purchase order often includes a legally binding contract which can form a base of legal action against either party by the other, in case of any violation of the agreed terms.
Sales Order vs Invoice:
Now let us look at what are invoices. After the seller has received and accepted a purchase order and drafted and processed a sales order, he usually sends the client an invoice. An invoice, in particular, specifies the amount of money the customer owes a vendor for the goods or services mentioned and agreed upon already in the sales as well as purchase orders.
The key distinctions between the sales orders and invoices are each document’s relative purpose and timing.
A sales order generally confirms the sale. It signals the vendor to start all the subsequent processes leading to the final delivery of the goods or services such as assembling, preparing, packaging, etc.
Invoices step in after this process. With the help of the details mentioned in the sales order, invoices indicate the buyers the amount, date, and mode of payment for the purchased products or services.
Importance of sales orders:
Sales orders are absolutely crucial to keep track of your inventory and sales. It is important to know the minute and important sales your business is making and sales orders aid in procuring this information.
They help you to analyze the stock, need, and demand of your products or services.
Moreover, sales orders are very important in reducing the risks of product misstatement in your company’s net financial report. It eliminates any form of inaccuracy in a financial report that might directly and significantly impact your company’s financial decisions based on faulty reports.
Sales order format:
It is imperative to know the key information points that your sales order must contain to ensure a smooth and easy sales process without any problems.
Given below are a few key information pieces to include in your sales orders:
· Client’s company and contact
· Client’s name and contact
· Client billing information
· Client shipping information
· Goods or service information
· Actual Prices before taxes
· Applied tax, delivery, and shipping charges
· Net price after taxes
· Previous deposit if any
· The current balance
· Terms and conditions stated and defined by your company
· Required signatures
· Miscellaneous relevant information if necessary
Now, as an effective SALESPERSON! We can do three things from here.
1. Not ignoring the opportunity and blaming the situation for revenue loss.
2. Taking important notes and going back to revisit your sales strategy with the growth mindset.
3. Reaching out to The DriveSales™ if you need any specialized help for sales.
To conclude, what you choose to think also provides some idea of your development as a consultative salesperson. It is something like Jeffrey Gitomer quotes “Great salespersons are relationship builders who provide value and help their customers win.”