How do you show Order Accuracy?

Order accuracy is how closely the items in an order match what the customer requested when placing the order. Your order accuracy rate tells you how often your company fills customer orders correctly. It keeps track of many things, such as the right items, quantities, and specs the customer requested.

There are a few ways to check when an order is correct:

₷ Percentage of correct orders: This is the simplest way to find the percentage. Just divide the number of orders correctly filled by the total number of received orders.

Line item accuracy is the accuracy of each item in an order. This means checking that each item is correct, in the right amount, and meets the set standards.

Quantities: the accuracy of the quantities ordered and delivered, ensuring that customers get the correct number of things they request.

Specifications: This section lists any unique needs or features of an order, like size, color, or design.

Error rate: This is the opposite of order accuracy and shows what percentage of sales is wrong. Mistakes can be broken down into different types, like picking, packing, or shipping mistakes, making it easier to find ways to improve things.

Customer feedback and returns—a qualitative measure that shows how customers feel about the accuracy of their orders and brings up problems that quantitative methods don’t pick up on.

You can use any of these ways by themselves, but most businesses use a mix to get a complete picture of how well their order fulfillment is going. Businesses often change these measures to fit their own operational structures and customer needs.

Like words

• Rate of order correctness
• Accuracy in order processing

Why order accuracy is important

Order accuracy is essential for customer satisfaction because it ensures customers get exactly what they bought. Businesses often use it as a key performance indicator (KPI), especially in industries like retail, manufacturing, and logistics, where keeping customers trusting and loyal means ensuring orders are filled correctly and quickly.

Let’s look at the most critical reasons why order correctness is essential:

Cutting costs

If you don’t correctly fill orders, you’ll have to pay a lot more for things like handling returns and exchanges, restocking goods, and shipping and material costs all over again. Also, returned things aren’t always good enough to sell again, which means you lose money and must pay more for inventory. A return generally costs a business about 66% of the item’s price.

Get Rid of Waste

Order accuracy helps reduce the time, labor, and materials that aren’t needed to finish an order in several ways.

It cuts down on overproduction and wasted goods. Only the needed products are made and kept in stock when sales are correct. This reduces the waste from making too many products and having too much stock.

• Reduces mistakes and extra work. When orders are handled correctly, the chance of mistakes goes down. Because there are fewer mistakes, fixing or replacing broken goods takes less time and money.

Lessens trash from transportation and movement. Correct orders mean fewer returns and less need for extra shipping and handling to fix mistakes, which cuts down on movement and transport that isn’t necessary.

Efficiency in Operations

Order processing that is done correctly makes the work run more smoothly. This reduces the time it takes to fix mistakes and wait for more goods to finish the wrong orders. You can ensure that getting and sending an order goes more smoothly and faster if you have high order accuracy.

Customer Happiness

Order accuracy and customer happiness go hand in hand. Eighty-three percent of business-to-business buyers would instead order online, so to keep customers coming back, you must be able to:

offer self-service ways to place an order

get those orders and fill them as soon as possible without making any mistakes

give quick and correct answers to questions and complaints

Plus, customers can share their experiences with others on social media and online review sites, so sending out wrong orders all the time will hurt your image. Research from G2 shows that 90% of buyers are more likely to buy something after reading a review of it. And if yours say things like wrong orders being filled or errors being fixed slowly, it will turn people off.

Look for ways to make things better.

You can find specific ways to improve by asking customers for comments and keeping track of metrics for order accuracy. For example, if the error rate is high in a specific type of product, it could mean there are problems with managing inventory or with the accuracy of the seller. Or, if many customers say that the item’s specs are wrong, you should look at how you check for quality.

Changes to Order-to-Cash

For efficient cash flow (and, as we already said, long-term trust), you need to ensure your order-to-cash cycle is as quick and smooth as possible. Billing and collecting payments go more quickly when orders are correct. If your order accuracy rate is low, these things are likely to happen:

More time between cycles

A sales process that doesn’t work well

₷ Payments late (or not paid at all)

• more money spent on getting bills

These problems can hurt your ability to keep your cash flow and profits in good shape. Even if you get paid on an invoice, you might have to give returns or credit notes later because the order wasn’t correct. That is, you can’t turn orders into operating income quickly or reliably if you have to fix processing errors all the time.

Problems with Getting the Order Right

Most of the problems we face today with correctly handling orders are caused by one of three things:

Human mistake in taking orders

Inventory handling that isn’t up to par

Things that have to be done by hand, like entering orders, can lead to mistakes

Today, these five things make it hard to get the correct order:

Not Having the Right Technology

Mistakes are more likely to happen if you don’t use modern technology like barcode reading systems and warehouse management systems (WMS). Sales tools like configure, price, and quote (CPQ) software make it easier for correct orders to be sent from sales to fulfillment, so there is no chance of misunderstandings during the handoff.

B2B makers and e-commerce companies also need to use these tools to ensure customers can quickly get the items they want. Putting in an order only to find out the item you want is sold out is the worst. And for the customer, some of the worst kinds of order mistakes happen when they don’t use the right program.

It’s important to note that a tool can do a specific job but still cause problems with accuracy. Your order accuracy will still be wrong if there are problems with how the data is shared between systems or how it connects to other platforms in the tech stack.

Complexity of Order

A big reason why B2B companies like CPQ software so much is that B2B sales are usually very complicated. For most business-to-business sales, you must consider many things, such as custom pricing models, bulk and volume discounts, payment terms, shipping choices, and delivery dates.

It is easy to make mistakes if you don’t put all of these conditions in one place where sales reps (and customers) can quickly find them and ensure they are correct when making an order. Entering data by hand only makes the situation worse.

Different types of sales channels

When there are more sales outlets, there are more chances for orders to be mishandled. Customers who can buy from you in multiple ways—by calling a sales rep, using an e-commerce platform, or emailing you—will have problems with their orders if the information across these platforms isn’t correct.

But selling through more than one outlet is standard these days. As well as digital marketing and in-person sales, most companies have at least one e-commerce platform or use online marketplaces like Amazon to find new customers. Keeping things consistent across all these channels and sharing information becomes a challenge.

Processing orders by hand

Any process done by hand will likely make mistakes, including handling orders by hand. Additionally, it can’t be expanded if you get a lot of orders or proliferate. What does your business do when it grows? The “learning curve” says that as you get better at handling orders, the number of mistakes decreases, but accuracy rates decrease.

It’s important to note that this process isn’t just for entering orders by hand. Suppose your business can’t automatically update orders. In that case, data may have to be entered again, leading to wrong orders at other stages of the fulfillment process or when items are returned or exchanged.

Not enough labeling and packaging

Labels that aren’t clear or are wrong on goods and lousy packaging can lead to the wrong items being sent out or products getting damaged in transit, both of which affect the accuracy of the order.

Organizations have to spend more time and money to fix the problem when this happens. It also makes customers unhappy, making them less likely to trust your brand.

Deliveries with less-than-ideal route planning

Mistakes can still happen during delivery even if your whole order is correct, has the proper labels, and is well-packed. Manually planning routes can cause problems with logistics that can slow deliveries and make it harder to get accurate estimates of when they will arrive.

Customers won’t be able to plan their supply chains around your delivery dates if they don’t understand how long it will take to get their products. They’ll have to find a new vendor to be more reliable (and make more money) for their users.

Things that affect how accurate an order is

Order accuracy in your business means giving accurate quotes (even for complicated items), turning those quotes into purchase orders or bills, sending that information to the fulfillment team without having to rekey data, and shipping and delivering the right items. Anything that gets in the way of any of those things will make the accuracy of the order worse.

Some things that make order accuracy better are:

• The right way to handle inventory
• Putting jobs like picking and packing into machines
• Putting in place regular quality checks during the order fulfillment process
• Documentation that is correct and complete, such as order forms or packing guides
• Enough teaching for workers on how to use streamlined processes
• The most common things that can make your order less accurate are:
• Your system can’t handle all the requests that are coming in.
• Not being able to turn a correct quote into a correct order form
• Mistakes made by people while picking, packing, and sending
• Incorrect inventory keeping and out-of-date information on availability
• It’s not easy for departments to talk to each other.
• Not utilizing high-tech tools such as warehouse management systems (WMS)
• KPIs for Making Sure Orders Are Correct

Costs of Fulfilling an Order

Many things you can do to lower the cost of processing are directly linked to ensuring orders are filled correctly. There is often a link between getting orders right first and having lower average delivery costs.

High order accuracy means customers get precisely what they ordered, so they don’t have to return or replace items as often. There are costs involved in handling returns, inspecting the returned item, restocking it (if possible), and maybe even sending out a new item. These costs are in addition to the cost of shipping the item back.

• High accuracy rates usually mean the fulfillment process is streamlined and works well. This can lower workers’ costs and run the business that handles orders over time.

Dealing with mistakes usually means doing more paperwork, like having customer service handle complaints, give refunds, and work with logistics to set up return orders. So if you get more orders right, you can lower the cost of processing and the other way around.

Rate of Order Filling

Your order fill rate tells you how many of your customers’ orders are shipped on time and in full without you running out of stock to fill them. It shows how well orders are filled and how efficiently the supply chain works, but it also shows how accurate the orders are in a roundabout way since wrong orders often cause delays or only part-shipments.

Duration of an order

How long does it take for a customer’s order to be made, processed, filled, and delivered? This is called order cycle time. This KPI includes all the steps needed to complete a customer’s order, such as the times for picking and packing, sending, and delivery.

It will usually take longer to process orders if they aren’t correct the first time. Mistakes must be fixed before the shipment can be sent out. The time it takes to process an order will also likely go down if you can get more orders right.

Rate of Return

Your return rate is the portion of orders customers return because the goods received were wrong or damaged. It would be great if no one ever had to return an order, but that won’t happen. That is, a low return rate means that your order is usually correct.

Accuracy in Order Picking

When it comes to making sure orders are correct, the picking process is mostly to blame. It is possible to:

• If you choose the wrong part for a complicated or customizable product,
• Put the wrong item in the box.
• Please send it to the wrong customer.
• Please do not check the item before sending it out.

Yes, the sales and shipping teams are also in charge of ensuring the order is correct. The warehouse team, on the other hand, does most of the work. They pick, pack, and ship the orders. So, finding out how accurate they are (per order or per thing) can help your business determine what it needs to work on.

It’s time to fix mistakes.

The average time it takes to fix order mistakes shows how well your company’s process works at fixing them. It’s essential because fixing mistakes quickly keeps customers happy, even if the accuracy rate is high.

Best Ways to Make Sure Your Order Is Correct

Generally, to make orders more accurate, businesses need to improve how they handle their inventory, make picking and packing orders more accurate, and put strong quality control measures in place. Many technologies, like automatic inventory systems and data analytics, can help get orders right.

Here are the best things we do to make sure orders are correct as often as possible:

ERP, CPQ, and WMS tools that work together to send and receive data quickly during the order fulfillment and return processes.

₷Automate tasks that used to be done by hand, like entering data, to lower the chance of mistakes.

• Check for quality at critical points in the order fulfillment process, like when quotes become buy orders, when orders are picked up from the warehouse, and when they are packed up to be shipped.

Implement barcode reading technology to reduce incorrect picks and the chance of making mistakes when entering data.

Ensure everyone is on the same page about product availability, order changes, and returns by prioritizing communication and feedback with customers, vendors, and internal departments.

• Invest in and train your staff. Ensure they know what they need to do to keep the order correct and have been taught how to use the tools and technology that help.

Review and examine your order accuracy data regularly to find patterns in errors and places where you can improve.

How to Make Sure Your CPQ Software Orders Are Correct

CPQ is vital to ensuring orders are correct, especially in sales settings with many custom configurations, pricing, and quotes.

Rules and settings for products

Quote tools use a set of product rules already set (either by you or an administrator) to control how products can be set up. That way, whenever a customer or sales rep sets up a product, they only choose legal and working product combinations.

Helpful Selling

When salespeople or users use CPQ, they are led through choosing a product. Guided selling is based on “if-then” processes and product rules. When a user selects one configuration option, the ones that follow are automatically changed, and options that don’t work with each other are automatically filtered out.

Integration with systems for placing orders and sending them out

Choosing the right CPQ software will work perfectly with your order management and fulfillment tools. This integration ensures that the order handling system gets the correct information from the sales quote, contract, invoice, or purchase order.

Updates on inventory in real-time

CPQ software can show you your inventory in real time by connecting it to your ERP and WMS. That way, your sales reps and customers will know how much stock you have and what products are available. This will help you avoid orders that can’t be met because you’re short on stock.

Rules for pricing and managing discounts

Pricing rules change the price for each customer based on their buying group or other unique factors. Discounting management ensures that your discounting approach is the same across all your sales channels.

Workflows for automated approval

CPQ software has automated approval processes for quotes that meet specific criteria, such as high discount levels or custom configurations. These are for unique customers who don’t fit the standard pricing and discount structure. These workflows ensure all the necessary approvals are given before an order is completed. This lowers the chance of mistakes even more.