Immo Bohm
16 October 2009
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Windhoek — I had a really interesting day yesterday. We were here in Kenya, in a ERP system demo for a 250 user company, and we were actually demonstrating HansaWorld while another ERP system provider was present, and then we watched while they demonstrated their system. Interesting indeed. We joked that this may be the new way to buy ERP systems.
What transpired was that both systems were very similar in their underlying functionality, i.e there is the best of breed process of Quotation - Sales Order - Delivery - Invoice. But there it stopped. There is a marked difference on how systems achieve this process, and how this affects usability. With hundreds of users processing hundreds of records every day in a company, usability really is an important factor in your ERP or business management system. So look out for a system that continuously wins awards for usability, since this is something not easily noticed in flashy marketing material.
But this is not what today's article is about. Today we want to explore Sales Orders a bit more, and some of the features you should be on the lookout for:
Currency and Price-list updates: Your system should allow you to easily recalculate the prices on the sales order according to the latest exchange rate if you wish to, since it is not always necessary or desired. Also, you would want the possibility to set a specific exchange rate for this specific sales order, since you might have agreed on a specific exchange rate with the customer. Of course you will only need this if you export or accept multiple currencies in your store, but with Africa booming as it is, who is not planning to expand beyond our borders nowadays? If you are not planning to, well, I think its a good time to start.
Something else you might want to control on your sales order is the delivery mode and delivery terms. The delivery mode allows you to indicate how this order is to be shipped. You can then setup different delivery modes, such as different courier companies, cargo companies, or delivery routes for your own vehicle fleet. Using such a delivery mode, your dispatch staff can then easily run reports to see which orders must be handled by which courier company, or which orders must be sent with which delivery vehicle. This allows the salesman to have control over the delivery destination without the need of phoning dispatch all the time.
The delivery terms setting allows you to specify the terms and conditions of transport. Typically you would agree with your customer under what terms and conditions you will deliver to them, and these terms will then automatically print on each sales and delivery document. Delivery terms are typically based on Incoterms or "international commercial terms". Incoterms are a series of international sales terms, published by the International Chamber of Commerce (ICC) and are widely used in international commercial transactions. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices. Delivery terms typically used include FOB (Free on Board) and CIF (Cost, Insurance, Freight).
FOB is the classic maritime trade term. The seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. This is typically for Maritime transport only. It also includes Air transport when the seller is not able to export the goods on the schedule time mentioned in the letter of credit. In this case the seller allows a deduction of sum equivalent to the carriage by ship from the air carriage.
As you can see, this can get pretty complex and legal. We will deal with more Incoterms next time.
Until next time, and remember......keep it (A)FRESH!
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