Sales and Purchase of Items - Essay Example

A sales order processing system is a very important tool that facilitates not only the sales and purchase process with efficiency and accuracy but also helps to generate all the relevant information that is required by the administrative and managerial heads of the companies. The information thus generated promotes better management of the inventory as well as helps to devise strategies and plans to increase its growth and enhance its public support. Hence the data that is entered initially during the sales and purchase process is very crucial for the firm.

These processes can be broadly classified into six main areas;
1. It first creates a sales order number that is unique so that the sale or purchase can be easily identified in case of any dispute or otherwise.
2. The system then differentiates the mode of sale and categorizes it into direct sale orders or internet-based orders. This gives the management to make appropriate strategies and plans for their existing or emerging market.
3. With category and brand specified, it then checks for the stock status so that in case of any shortfall, alternative brands can be suggested or sold. This information (category and brand) also helps to market other products that may add value to the items asked for.
4. The system then checks for any special offer or discount that the item might have at that particular time. This is an important process because the current market scenario has necessitated the introduction of special schemes to attract customers to maintain their competitive edge. ‘The ultimate schedule (discount) maximizes the suppliers’ resultant economic gain but does so at absolutely no added cost to the buyer’ (Monahan, 1984).
5. If the mode of payment is other than a cash transaction, the system performs a credit check for the customer and accordingly, informs and suggests the customer for alternatives for payment schedules.
6. The system then confirms or refuses the sale/ purchase order sends the same information to the terminal and generates an invoice or sale/ purchase receipt.

The completion of a sales order is but the first of many other requisites of the input information that are essential for the management of the company. The growth and the prospects of the business depend on the input data as they can divulge vital information about the products and the customers. The sale processing data helps the management to disseminate information that can be categorized into the following output formats;

1. The input data helps to generate current inventory status so that the products that need fresh stocks can be ordered much in advance.
2. The data also helps the management to assess the order flow pattern of the products and services so that the management can take appropriate steps in meeting the demands of their customer either by increasing the shopping hours or employing more staff to deal with the rush. This helps the management to maintain a high level of customer satisfaction and general efficiency. This applies both to the days of the month and the specific hours of the day, during which there is a marked difference in the sales and purchase pattern.
3. The data also help in finding out the popular items which are sold or purchased as well as the brands that are preferred thus helping the firm to introduce items or products that add value to the ones that are already popular.
4. The management can also maintain its client base by making efforts to personalize its service and send new birthday greetings to the customers as well as new information regarding the sales and services of the products and the company.
5. The sales order system facilitates the most crucial of all reports which is the sales and profit report that shows the current financial status of the company.
6. The sales order system is also important because it helps the management to know about the preferences of the customers and forecast the sales of products and services that are popular with the public. It can then make strategies and plans so that new market spaces can be explored or created through effective advertisement and marketing strategies.

The sales order is a very important schedule in the business information system. ‘A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both’ (Porter, 1996). The initial data gives a vital clue about the personal preferences of customers and also about the various products and services that are popular amongst the masses. The input data creates a huge scope for the business and the products which are then exploited by them. It can therefore be concluded that for a business to succeed in this competitive time, the input sales data must be highly relevant and entered with precision and accuracy. Read More