Order processing is at the heart of your business – automate it!
Order processing is the core, high volume workflow at the heart of your business. Ecommerce businesses thrive and suffer at their own efficiencies within order handling, and as such, the process is continuously under scrutiny, trying to remove all points of error whilst simultaneously speeding it up with fewer people.
When we think of order processing, we tend to think of warehouse operations, but the story actually starts when the order is placed by the customer, and will only finish once the order has been fully dealt with and financially recognized. Each business has its own workflows (whether they know it or not!) that defines the touch points they have with each order, from both a human interactions and business systems point of view.
What’s in the guide?
After years of discussing workflows with retailers from all industries, using different business softwares and operating different models, we’ve drawn up an overview of the typical order workflow. Within this guide, we’ll review the workflow, calling out steps that are easy to get wrong and have unseen costs, where software can step in and automate and perform a task for you, as well as the steps that you shouldn’t automate …at least not straightaway.
In this guide, we’ll cover the key steps in sales order processing, including:
- Creating the order
- Recording payment
- Reserving inventory
- Quality checking
- Fulfilling the order
- Updating the order status
- Packing the shipment
- Determining the shipping method and printing the label
- Updating the customer
- Updating accounts
Creating the order
Ecommerce platforms automatically create the order once your customer clears checkout; solutions like Brightpearl have integrations to leading sales platforms like Shopify or Amazon, and whenever a sale is made, it’s downloaded and collated for processing, along with any customer information for CRM and marketing.
The benefit of having this automated is that you don’t need to spend time logging into each individual ecommerce admin area to process or download orders. Lack of automation here also opens up risks in other areas, such as the impossible task to maintain accurate inventory levels across your channels if they are not connected to an omnichannel solution.
Aggregating sales channels through an integration has an inherent risk of orders being missed or dropped, which can quickly diminish the efficiency of aggregating orders. It is imperative to work with an automated solution that has a clear alert system to flag any orders that could not be downloaded and why, along with redundancies built in to minimize missed orders.
Typically, you’ll only want to ship what your customers have paid for. It’s important to track the payment status of orders, especially in the case of pre-orders or deposits. Allowing customers to pre-order items, buy on terms or place deposits can be cumbersome if you don’t have a system in place.
Every system tracks and updates an order’s payment status automatically, which is great, and Payment Status is always a field used to govern further automation, such as automatically fulfilling orders when they have been marked as paid. It’s also possible to implement an automated authorize on checkout and capture on shipment, which is preferred by many customers and makes order adjustments much more straightforward.
One major risk of automating your payment processing and verification is that it could take longer to notice any problems with your payment gateway. It’s important to frequently reconcile your transactions with your accounts to ensure that funds have been correctly transferred.
Once an order has been placed or paid for (depending on your preference), you will want to reserve or allocate inventory to the order so that the items are not sold again. Inventory changes triggered by reservations will need to be updated out to your connected sales channels to ensure they all have correct inventory levels, reducing the threat of overselling an item.
Nearly all inventory management tools will automatically reserve inventory for orders from connected channels like Shopify, Magento or Amazon. Manual orders over the phone, in person or wholesale are prime candidates for automation rules. Set up specific rules to reserve inventory at the correct step in workflow, whether it is completed payment, contract signing or delivery date. This will save your team the administrative cost of having to allocate inventory to those orders manually and improve customer service by ensuring you are correctly reserving inventory for sales made.
It is imperative that a team fully understands all channels’ interaction with the inventory management platform. Without a solid understanding of the automation process, a team member could accidentally reserve stock or push false inventory levels to the channel, which could lead to over-selling or missed sales.
Giving the order a once over
The review stage of an order can vary widely from business to business. Some are happy to let every order go straight to their warehouse team, whilst others may require every order to be reviewed because they are prone to fraud, are high value or for a number of other reasons.
An automation rules engine allows you to define the criteria for orders that can be automatically routed for shipment and which orders require a human review. This can significantly reduce the amount of time required to process orders, and evolve your order processing routines to managing your business by exception. Automation can run checks at your designed points to ensure all compulsory fields are set and valid, and then highlight the orders that need attention.
You need to test-drive and vet your order exception criteria before automating. Enacting automation rules before you have thoroughly understood their impact could lead to problematic orders automatically assigned for shipment. Problems created by automating these orders will take more time to fix than the automation ever saved!
Dispatching the order for fulfillment
Once an order has been approved for shipment (either manually or automatically), the next step is to dispatch it from the proper fulfillment location. The complexity of dispatching for fulfillment can vary widely – a business with a single warehouse does not require the same level of automation that a business with multiple warehouses, a 3pl or freight forwarder might.
For businesses with multiple fulfillment locations, the job of routing orders can become a cumbersome and highly specialized task (i.e. what happens when your router is out sick)? An automation app like Brightpearl’s allows you to create a set of fulfillment rules that automatically route orders to their optimum warehouse with a set priority of backup warehouses.
There are a few risks to be aware of when automating your fulfillment, and given that mistakes at this stage result in inventory going out incorrectly, it’s important to walk before you run. Inaccurate inventory data creates the first risk – the time lost recovering from improperly routing an order based on an inventory discrepancy between your system and physical inventory can be significant. The next area is if you have a 3rd party team involved – if they lack the context to know that orders were potentially incorrectly dispatched, they will typically begin shipping items immediately. It is important to work with your 3rd party provider and understand the process from their side too.
Updating the order status
Once the order has been dispatched, most businesses typically update the order’s status to a processing status. This helps to identify which orders still need to be routed and the current burden on the warehouse staff, as well as keeping the customer informed with order progress.
With an automated system, it is simple to configure an automatic status update for an order once it has been routed to the warehouse. This saves the time of someone having to manually update and is far more accurate.
If there are gaps in the rules for updating order status, then your order data can quickly become confusing, and if your order statuses are public (i.e. they’re linked to a webstore), then your customer could be misinformed.
Packing the shipment
The next step is for your warehouse crew to receive the order then get it picked and packed as efficiently as possible. This is a process that can be highly error prone due to seasonal or high turnover of staff, similar looking items, disorganized warehouses and time pressures. All these lead to inaccuracies or delayed shipments and unhappy customers.
Removing the step of having to manually print a pick list or packing slip can shave minutes off each shipment batch in your warehouse processing. Many warehouse management applications can be configured to automatically print out picking routes for warehouse staff, allowing them to focus on efficiently picking and packing items instead of working with software. Taking things even further, many warehouses have shifted to a paperless approach using iPads or wireless scanners. Through software and automation, you can reduce the time spent and mitigate packaging errors, leaving you confident that the boxes leaving your warehouse aren’t late, and have got the correct items in them.
As with any automation step, there are risks in orders being missed or lost through automation rules without a human review. It is important to have checks in place to prevent missed orders while you are establishing your automation, and even when it is fully established.
Determining shipping method and printing the label
Once orders have been picked and packed, the shipment method must be determined. This is typically a standard carrier or selected by the customer. Selecting a more expensive carrier or level of service than required can have serious implications for the margins of an online business. It is important to consider the type of product, customer location and urgency when selecting the proper shipper. USPS is typically cheaper for smaller, less urgent items, while UPS and Fedex provide better rates for larger or more urgent orders. Although selecting the optimal carrier for every order seems like the correct approach, the savings could quickly be erased if a staff member has to manually check rates and services levels to assign shipment – this is where automation comes into play.
Tools like Shipstation and Shiptheory allow you to create shipping automation rules based on shipping methods coming from Brightpearl. This allows you to choose specific options, like shipping with USPS for less urgent orders, and shipping via UPS or Fedex for more urgent orders. Brightpearl’s automation app helps to take things further, and allows you to automatically update a shipment method based on things like an order containing a specific product or coming from a specific location.
Shipstation, Shiptheory and other shipping aggregators can also remove the task of having to arrange carrier pickup for shippers like Fedex and UPS. Once an order has been created, they’ll receive an alert for pickup.
Your automation rules for assigning shipment need to be fully vetted before they are implemented. If they are incorrectly implemented, you could actually spend more than you need to on shipments, without someone there to monitor.
Updating the customer
The modern online shopper has come to expect a high level of visibility on the status of their order due to the service levels of Amazon and other large retailers. A key step to providing this visibility is sending a customer an update when their order has shipped, via which shipper and the associated tracking number. Failing to provide information can lead to your phone, inbox or support staff being flooded with “Where’s my order?!” questions. However, logging into multiple sales channels and copy-pasting tracking numbers from a shipper’s website is not a great use of time. This is a problem that can easily be solved through, you guessed it, automation.
Using a tool like Brightpearl along with Shipstation or Shiptheory, allows you to completely automate the process of alerting your customer of successful order shipment. Once an item has been shipped in Shipstation or Shiptheory, the tracking reference number is automatically passed to Brightpearl and then relayed to the connected sales channel such as Shopify, Magento, Amazon or eBay.
The major risk with automating the process of customer updates is going too far and sending too many updates from too many platforms. It is important to map out and test exactly when customers should receive emails, what those emails look like across major email clients, and which platform is sending those emails.
With order processing at the heart of your ecommerce business, and a most crucial workflow for customer satisfaction, efficiency and business growth; why not automate the parts of the workflow you can and shave minutes and hours from your processes every week. With an omnichannel system, like Brightpearl, at the center of your workflows, you can reap so many benefits and give yourself the time and energy to focus on other growth activities. We’ve entered the era of automation, and there’s no reason why your order workflows shouldn’t be able to keep up – find out more today!