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Sales Process

Sales enquiry, quote, order, sales return

The sales function involves decisions and processes that are required to sell products and services. The sales cycle begins with identifying prospective customers and opportunities. The sales cycle ends when the opportunity is converted to an order and the products or services have been delivered. If the customer returns defective items or claims allowances for poor services, the sales process extends to the sales returns process. BusinessAhead provides systems and facilities to enable you to carry out your entire sales process through the system.

The sales function entails the following activities:

  1. Identify business opportunities
    • Identify prospective customers and opportunities.
    • Manage the customer database.
    • Record sales inquiries from customers.
    • Prepare sales quotes.
  2. Accept sales orders
    • Accept orders from customers.
    • Receive advance payments from customers.
    • Receive deposits against order.
    • Place deposits against order.
  3. Deliver items and follow up
    • Reserve items for shipment against sales orders.
    • Issue invoices for items delivered.
    • Adjust advance payments against invoices.
    • Account for items delivered.
    • Follow-up on back orders.
    • Account for receipts.
    • Manage accounts receivable.
  4. Manage sales return
    • Issue Return Merchandize Authorizations (RMA) for customer returns.
    • Account for customer returns.

Sales Process Overview

The sales process is managed through the following sales documents:

Sales Enquiry

The Sales Enquiry is normally the first document generated in the sales process. The sales enquiry:

  • Records details of items for which an enquiry has been received from a customer.
  • Is recorded in the system for reference purposes and is used to generate a sales quote.

A Sales Enquiry document is directly created from the sales enquiry document received from the customer. The information in the sales enquiry flows into the sales quote and from the sales quote into the sales order and from the sales order into creation of Delivery Note, Invoice and related documents, as and when these documents are generated during the various stages of the sales process.

BusinessAhead provides you the flexibility to directly create a Sales Quote and skip the sales enquiry stage. You may even skip the sales quote stage and directly create a Sales Order.


Sales Quote

The Sales Quote is the second document generated in the sales process. The sales quote:

  • Records details of items as per the sales enquiry along with prices. If a sales enquiry document was created, the sales quote can be prepared on the basis of the sales enquiry document.
  • Helps the Sales department to generate sales order based on the quote given.

You may use the information in an existing Sales Enquiry, to create a Sales Quote, or you may directly create a sales quote without a sales enquiry. The information in the sales quote flows into the sales order and from the sales order into other subsequent documents, as and when the documents are generated during the various stages of the sales process. BusinessAhead provides you the flexibility to directly create a Sales Order and skip the sales enquiry and sales quote stages.


Sales Order

A Sales Order is a mandatory document in BusinessAhead. A Sales Order document is essentially a record of order received from your customer. It contains the same details as is contained in the customer's order document. An order, when created, is modifiable as long as it has not been acknowledged to customer. Once an order is acknowledged, its details cannot be modified. However, if situation arises, an amended order can be created on the basis of the current order.


Sales Invoice

A sales invoice is normally created after items are shipped to the customer. However, you also have the option to create an invoice before shipment begins, so as to collect the entire money in advance. This is particularly required for sales at your eCommerce website where you would collect payment at the ordering stage itself. It is on the basis of the sales invoice that customer balances and accounts receivable are updated. Accounting entries are automatically made when a sales invoice is created.


Advance Receipt

You may receive advance money from your customers before the execution of an order. Advance money may be received in general from a customer who is likely to place one or more orders on you in future, or it may be received for a specific order already placed on you. Accordingly you can have advances tagged to a customer in general as well as advances tagged to a specified order of the customer.

Advance money received against a specified order would normally be used to pay for invoices/dues pertaining to the tagged order. When adjusting customer invoices/dues, BusinessAhead does not differentiate between the two types of advances. It accumulates all advances received from a customer and makes it fully available for adjusting all customer dues. However, at the ecommerce website end, the customer will not be able to utilize the advances that he paid against specific orders. For making payments for online purchases/pending dues, the customer will only be able to draw from advances that are not tagged to any order.


Deposits placed with Customer (Deposit Out)

Certain types of sales contracts, particularly contracts with Government departments, require you to place a security deposit with your customers before the execution of an order. If you are doing regular business with such type of customers, you may place a deposit in general which is not tagged to any specific order. Accordingly you can have Deposits tagged to a customer in general as well as deposits tagged to a specified order of the customer.

Security deposits placed with customer are normally meant to be returned back after satisfactory fulfilment of the order. In the extreme eventuality the customer may retain back the deposit partially or in full. BusinessAhead provides you with the facility to raise a Debit Memo on the customer once the return of Deposit is due. Subsequently, when the customer makes a payment against the Debit Memo, you can record the receipt.


Deposits placed by Customer (Deposit In)

For certain types of sales orders, that may require you to make significant initial investment, you may seek a security deposit from your customer so as to protect yourself from unforeseen eventuality which may lead to cancellation of order resulting in significant loss to you. You may be collecting security deposits even from your resellers whom you may be typically giving supplies on credit. Accordingly, you can have Deposits tagged to a customer in general as well as deposits tagged to a specified order of the customer.

Security deposits placed by customer are normally meant to be returned back after satisfactory fulfilment of the order and receipt of final payment from customer. In the extreme eventuality, if the customer does not pay, you may retain back the deposit partially or in full to recover unpaid dues. BusinessAhead provides you with the facility to raise a Credit Memo on the customer once the return of Deposit is due. Subsequently, you can process the credit memo further and issue a refund of money to the customer.


Delivery Note / Challan

A Delivery Note is a mandatory document in BusinessAhead. It is the document that accompanies the physical goods when they are despatched to your Customer.

Each delivery note passes through the following stages:

  1. Open

    In this state, the delivery note is just prepared but no items are booked or drawn from stock. The delivery note document shows item quantities, associated Lot Nos. and/or Serial Nos. that can be drawn from the inventory of the warehouse associated with the Sales Order. However, at this stage, the items are not drawn from the inventory. If you save the delivery note in the Open state and re-open it at a later date, BusinessAhead will check the item availability again in the associated warehouse's inventory and update the delivery note to show items that can be drawn from inventory at that point of time. When, in open state, you can even delete the delivery note.

  2. Stock Booked

    In this state, available stock quantities are booked and reserved in the warehouse against the delivery note. Any shortfalls are automatically back-ordered. The delivery note is now Frozen. However, you have the option to reverse from this frozen state back to Open state.

  3. Finalized

    In this state, items are drawn from stock and accounts are updated. The delivery note, once finalized, cannot be reversed or deleted.

BusinessAhead allows you to define at the Sales order level whether Partial Shipment is allowed or not. If partial shipment is not allowed the system will warn you if you try to ship partial items. However, it will still allow you to ship, providing you flexibility in your delivery process.


Payment Receipt & Order Closing

When you receive money from your customer against a specific Invoice, you can create a Regular Receipt. Regular Receipt is also created when money is received against a raised Debit Memo.


Process Customer Refund

You may need to refund money to your customers under various circumstances, such as:

  1. Sales Return for refund.
  2. Return of Deposits placed on you by your Customer.
  3. Return of unutilized Advances.
  4. Credit given to your customer in lieu of some special scheme or discount or any unforeseen purposes.

BusinessAhead provides a very simplified method of refunding money to customer. Refunds are always processed against Credit Memos. A credit memo is first issued as the first step to returning money to customer. This credit memo can then be either utilized by the customer to pay for future purchases or you can refund the money.


Debit Memo

You may raise a Debit Memo on a customer to charge him on occurrence of unforeseen situations. For instance, your customer releases a cheque to you on account of payment and the cheque bounces. Your bank levies cheque bouncing charges to your bank account. You may now need to recover the principal amount plus the cheque bouncing charges from the customer. So you can raise a Debit Memo.


Credit Memo

Credit Memos are created under the following circumstances:

  1. A Regular Receipt that was partially or fully adjusted against advance or another earlier credit memo is cancelled in case of an unexecuted order. The amount that was drawn from Advance or an earlier credit memo, is credited back with a new credit memo record.
  2. Deposit In is returned. In this case a voucher is created to debit the Customer Deposit-in liability account with the amount returned and a Credit Memo is raised. The Credit Memo can later be converted into a money refund through the refund process.
  3. Items are returned. A full return handling process is carried out with the items received back in specified stock bins and item wise refund amounts are specified. In this case vouchers will be created to reflect increase in inventory (in case of return of inventoried items), and to reflect reduction in sales revenue due to the returned items.
  4. A Cash back is given to customer against some back-hand scheme.

If customer wants to en-cash the credit memo and not utilize it against future orders, then a payment voucher can be created when payment of money to customer is processed. Credit Memos can also be utilized to pay for any Debit Memo.


Backorders

Backorders are essentially Purchase Requests, automatically raised on your purchase department to initiate procurement of shortfall items. While preparing a delivery note, you have the option to auto-backorder quantity shortfall. You can then proceed with partial delivery of items and create a delivery note accordingly. Subsequently, when the backordered items are received, you can deliver the balance items through another delivery note.



Managing Sales Returns

Goods sold to a customer may be returned due to various reasons. Returning is the process where a customer takes previously purchased merchandise back to the seller/retailer, and in turn,

  • Receives a Credit/Cash Refund,
  • Receives a Replacement,
  • Exchange for another item (identical or different), or
  • Get the merchandize Repaired.

This should not be confused with Repair of merchandize done at customer site. RMA does not deal with merchandize that is repaired at customer site.

Retailers would usually accept returns provided that the customer has a receipt as a proof of purchase, and that certain other conditions, which depend on the retailer's policies, are met. These may include the merchandise being in a certain condition (possibly being re-sellable), and no more than a certain amount of time having passed since the purchase. In some cases, only exchanges or store credit are offered, while some retailers may even give a cash refund. For services rendered the customer is usually credited with the compensation allowed towards the unsatisfactory service.

Returning is generally offered by retailers as a courtesy to the customer. Often it causes the retailer to suffer a loss, because the merchandise, not being in sellable condition, must be re-sold at a discount or not at all. Hence, some retailers may charge a re-stocking fee or a return processing fee for the returned merchandise. While retailers are not usually required to accept returns, laws in many places require retailers to post their return policy in a place where it would be visible to the customer prior to purchase.


The sales return cycle in BusinessAhead involves decisions and processes related to customer returns. You can process the following Return policies:

  1. Return for Credit

    Against this policy you take back the item and credit the amount to the customer account by creating a credit memo. The credit memo can then be utlized by the customer for making any future payments to you.

  2. Return for Refund

    This is essentially similar to Return for Credit. However, the credit memo is further processed to release a cash refund to the customer.

  3. Return for Repair

    Against this policy you take the item back for repair. When items are returned for repair, they are shipped back to your warehouse/service center for carrying out the repair. After repair, the items are re-shipped to the customer.

    If item is out of warranty, you may repair for a charge. In this case you will need to create a separate order and invoice to bill for service charges and charges of any replaced components.

  4. Return for Replacement

    Against this policy you take the item back and replace it with a new item. This situation may occur when a defective item is sold and hence it needs to be replaced with a good item.

    This situation is essentially treated as:

    1. Return for Credit, followed by
    2. Supply of a new replacement item.

    While part (a) is handled by the return process, part (b) is essentially a new sale and is handled as a normal sale process. For part (a), the original item may be taken back and a credit memo issued to credit the customer with the returnable value. This credit memo can subsequently be utilized to pay for the replacement item. You may choose to supply the replacement item at the same value as the returned item.

  5. Return for Substitution

    This policy is applied in cases where customer wishes to return for substitute with another item. This situation will occur when customer finds, after receiving the item, that he purchased the wrong item and hence now needs to return it and buy another item in its place.

    This situation is essentially treated as:

    1. Return for Credit, followed by
    2. Supply of a new substitute item.

    While part (a) is handled by the return process, part (b) is essentially a new sale and is handled as a normal sale process. For part (a), the original item may be taken back and a credit memo issued to credit the customer with the returnable value. This credit memo can subsequently be utilized to pay for the substitute item.


Implementation of the above policies is done through the following steps.

  1. Log Customer Complaint/Return Request. Check warranty clause and accordingly prepare RMA document. The return policy to be applied should be ascertained at this stage itself and accordingly classify the RMA as -
    1. Return for Repair
    2. Return for Replacement
    3. Return for Refund/Credit
    4. Return for Substitute
    For each type of return policy a separate RMA document has to be prepared.
  2. Approve RMA and Email/Courier RMA document to Customer.
  3. Customer accepts RMA Terms and Ships Item(s).
  4. Receive Item(s). Inspect items and decide whether to return for repair/ replacement/ substitute/ refund. Accordingly, if required, reverse RMA approval and modify RMA document(s) to incorporate any change in RMA policy to be applied. Approve the modified RMA and send modified RMA document to customer to obtain fresh approval.

    Depending upon each Item's condition, receive in one of the following types of stock bins:
    1. Repair Bin (Items that are repairable). You may define such a stock bin as Customer RMA Repair.
    2. Scrap Bin (Items that are not repairable). You may define such a stock bin as Customer RMA Scrap.
    3. Normal Bin (Items that are in good condition and can be re-sold)
  5. Process RMA according to the RMA policy applied.
    1. Return for Repair: Items would have been received in Repair Bin. Carry out Repair & then Ship back items.
    2. Return for Replacement: Items would have been received in Scrap Bin. Ship back replacement items.
    3. Return for Credit/Refund: Items would have been received in Normal Bin, if in good condition, else if they are repairable they would have been received in Repair Bin and if not repairable they would have been received in Scrap Bin. Issue Credit Memo and if customer has sought for refund of money, further process the credit memo to issue refund.
    4. Return for Substitute: Items would have been received in Normal Bin, if in good condition, else if they are repairable they would have been received in Repair Bin and if not repairable they would have been received in Scrap Bin. Create a credit memo for the returned items to give credit to customer for the returned items. Next, prepare a new order for the substitute items and process it just like you would process any other regular order.
  6. An RMA processing may result in either a net payment to customer or a net receipt from customer. Accordingly, process Payment Invoice or Receipt Invoice.

How is Tax handled?

First time when an item is added to the order document, BusinessAhead picks up the applicable tax rate and loads it on the document. The tax % is not editable. It will always be applied as per assigned tax group and associated tax rules predefined from tax setup. The assigned tax value will remain fixed for the item in the document at all stages of order processing and will also apply during Invoice creation.However, when the order is in OPEN state, if you change any of the tax dependent parameters, such as Warehouse, Customer, Customer's Ship To Address or Document Date. Change in any of these parameters will automatically result in re-construction of items list with freshly fetched tax rates.

If any tax rate undergoes a change after the order has moved ahead in its processing stage, you can create an order amendment with the new tax rate. If partial qty of any taxable item is already supplied at the old tax rate and the remaining qtys are now to be supplied at the new tax rate, when you will amend the order, the original order will be foreclosed with qty supplied at the old tax rate A and create a fresh amended order for qty at tax rate B.



Sales Order Process at eCommerce website

Here is a summarized overview of the aspects of order process at the eCommerce website.

Shopping Cart
  • Customer is forced to login or signup before adding items to his shopping cart, so that customer specific pricing, tax rules and shipping options are displayed and applied.
  • Customer registers when placing order
  • Repeat customers need only login to place orders
  • Auto tax calculation
  • Auto freight calculation
  • Drop products from shopping cart
  • Edit quantity of products in cart

Order Process
  • Checkout procedure after shopping is complete
  • Order summary display on checkout page.
  • Secure transactions with SSL
  • Choice of shipping options
  • Choice of payment options

Order Confirmation
  • Automatic email acknowledgement for each order.
  • Copies of emails sent to email address of store owner.

Order Management
  • Suitable Admin interfaces to view and process every order received.
  • View IP Address of source computer used by customer while placing an order. Can be used to analyze customer's location vis-a-vis the address provided.
  • Cancel orders where payment is not completed.
  • Handle refunds in case of orders cancelled by customer.
  • Email alerts to customer on change of order status.