Customer Order Processing (Alberta Council)

From SJA

This is a draft document.

Contents 1 The Need 2 Policy 2.1 Purpose 2.2 Scope 2.3 Responsibility 2.4 Definitions 2.5 References and Related Statements of Policy and Procedure 3 Procedures 3.1 Order Forms 3.2 Non-Standard Pricing 3.3 Access to Orders 3.4 Notify Stores Department 3.5 Changes 3.6 Shipment 3.7 Invoicing 3.8 Reconciliation Process 4 Attachments

The Need

The efficiency and accuracy with which customer orders are handled has a major impact on the quality of customer service as well as internal control. In addition, credit must be checked as part of the order acceptance process.

The customer order processing policy ensures that the information required to service the customer and fulfill the order is obtained and that all goods shipped or services delivered are billed.

Policy

Information required to fulfill the order and to service the customer is obtained through the customer. A purchase order must be obtained from customers that request the use of purchase orders.

All goods shipped or services provided must be invoiced.

Purpose

The purpose of this Statement of Policy and Procedure is to set out the policies and procedures for order processing so that:

• Credit orders are processed only for customers who are authorized for credit
• Orders are processed accurately and expeditiously
• Orders are not to be processed for customers with a declined credit status in Unity.
• Only valid orders are processed.
• All approved orders requesting product be shipped are shipped.
• All shipped credit orders are billed
• Credit accounts are billed complete and accurate

Scope

This policy applies to all employees who have a role in fulfilling and billing a customer's order, including administration, training, stores, data entry, sales, and finance.

Responsibility

Customer Service Representatives are responsible for ensuring that:

• All required information for completing the order is collected
• Customers to be invoiced have an approved account status
• Product pricing is invoiced correctly

The Stores Department is responsible for orders required to be shipped ensuring that:

• The order is fulfilled as requested
• The order is packed to ensure it is delivered intact to the correct location
• Inventory records are updated

The Administrative Coordinator is responsible for ensuring that:

• All orders created are reviewed on a daily basis
• All orders are integrated from the point of sale system into the financial system on a daily basis

The Finance Department is responsible for ensuring that:

• All orders are integrated from the point of sale system to the financial system
• Orders are reviewed for correctness
• Any corrections are forwarded to the correct training centre for correction and follow up

Definitions

• CIF - Cost, Insurance, and Freight is a protocol for shipping goods in which the supplier bears the risks associated with the safe delivery of the goods up to the shipping destination.
• DDP - Delivered Duty Paid is a protocol for shipping goods in which the supplier bears the risks associated with the safe delivery of the goods to the purchaser and also ensures their safe delivery through customers, including loading and unloading fees, import licensing and related duties payments.
• FOB - Free on Board is a protocol for shipping goods in which the supplier bears the risks associated with safe delivery of the goods up to the point where the goods are passed into the hands of the shipper.
• Fulfillment is the actual delivery of goods from inventory to the customer. This is normally the responsibility of the Shipping Department.
• GST (Goods and Services Tax) is a form of value added tax, so it is charged on most transactions in Canada. The current rate of GST is 5%. The federal rate for provinces using HST varies from province to province.
• HST (Harmonized Sales Tax) is a combination of GST and a further amount that represents the provincial share of the tax, used in some Canadian provinces (New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario, and British Columbia) to simplify administration with a single sales tax charge. HST rates are shown below. For further information please refer to http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rts-eng.html.
  • Alberta - N/A
  • British Columbia - 12%
  • Manitoba - N/A
  • New Brunswick - 13%
  • Newfoundland and Labrador - 13%
  • Northwest Territories - N/A
  • Nova Scotia - 15%
  • Nunavut - N/A
  • Ontario - 13%
  • Prince Edward Island - N/A
  • Saskatchewan - N/A
  • Yukon - N/A
• PST (Provincial Sales Tax) is normally charged on most sales of goods (and some services only) in the province. PST is generally only charged on sales to the final customer. The precise rules vary by province.

References and Related Statements of Policy and Procedure

• Extending Credit (Alberta Council)
• Unity: Creating an Order (Alberta Council)

Procedures

Order Forms

All customer orders for product and/or service will include:

• Date of order
• Delivery/service date requested
• Name, address, and telephone number of customer for contact purposes
• Customer order number
• Detailed description of items ordered
• Detailed description of any special requirements related to the order
• Location to which goods should be shipped, if applicable
• Location to which invoice should be sent, if different from above, if applicable
• Details fo shipping and handling responsibilities, if applicable
• Name of person completing the sale
• Name of the person completing the order, if different from above
• Proof of credit check
• Prices calculated for the order
• Indicator of GST
• A note made in the comments field if GST exempt

Reference orders for more detailed information.

Non-Standard Pricing

• Any quoted price that does not correspond to a price in the published price lists must be approved in writing by a Vice President or Chief Executive Officer.
• Orders with non-standard pricing are reviewed daily by the finance department

Access to Orders

Customer orders must be accessible (by copy) by:

• The customer at the time the order is issued. This ensures that there is no misunderstanding as to the products or services ordered
• Stores for inventory tracking and refreshemnt
• Stores, to be included in the shipment to the customer

Notify Stores Department

If the order is not created by the stores department, they must be notified of the new order.

Changes

If the customer requests or authorizes a change to the customer order, a supplemental order must be produced quoting the original order number and the name of the invididual authorizing the changes for the customer. The supplemental order should also explain the changes required and clearly mark the order as a supplemental order. Copies of the supplemental order should be accessed or distributed as set out above.

Shipment

At the time of shipping, the order is marked as shipped, and passed on to administration the Customer Service Representative for invoicing purposes.

Invoicing

For customer's that are to be invoiced with an approved credit account the invoice will contain:

• Date of order
• Delivery date
• Name, address, and telephone number of customer for contact purposes
• Customer order number
• Customer contact reference, if applicable
• Detailed description of prodcuts/services supplied
• Location to which goods were shipped, if applicable
• Location to which invoice is addressed
• Quantities, prices, and extended amount(s)
• GST if applicable
• GST registration number
• Detailed terms and conditions of sale (printed on bottom of invoice)

Reconciliation Process

• Periodically, accounting will match shipping records against sales records adn investigate any discrepancies
• Reconciliations between sales orders, shipping records, adn accounts receivable should be reviewed and approved by teh Finance Manager.

Attachments

None