BUSINESS

What Is An Electronic Order?

An electronic order is an order issued and then sent in an electronic format. The order, also called purchase order, is the document that transcribes a request for goods and services from a supplier, specifying the conditions agreed between the parties during the commercial transaction.

An electronic order is exchanged through electronic data interchange solutions, also called EDI (Electronic Data Interchange) . Its use is an integral part of a set of electronic message flows that automates the purchasing process: order, delivery note and invoice.

More and more sectors are integrating electronic orders, both in B2B and B2G.

The benefits of exchanging electronic orders are the same as the benefits of using EDI solutions. Among these advantages, it is important to underline the scalability of an order flow, thus making it possible to extend this model as many times as necessary with as many partners as necessary.

Usually, the adoption of EDI solutions begins with the implementation of electronic invoicing flows. Adding other types of messages is usually an afterthought, and adding the electronic purchase order message is a natural evolution of the EDI flow.

EDI solutions have been designed with the aim of automating the integration of commercial documents within the ERP or the company’s Management System. This technology offers more security, agility and streamlines communications between partners with heterogeneous characteristics thanks to the exchange of standardized documents. The greater the number of trading partners (customers, suppliers, logistics operators, etc.) and EDI messages, the greater the benefits of these systems.

Currently, the exchange of electronic orders is becoming more democratic in many sectors, including the health sector (sector guided by public procurement practices) and mass distribution. In the specific case of health, the explanation is logical: faced with the need to guarantee the proper functioning of health infrastructures and the great heterogeneity of products and other supplies to be transported, EDI is a key element making it possible to optimize and improve the administrative management and operations of these establishments.

Advantages of electronic orders

Electronic ordering has advantages for both customers and suppliers. The immediate routing of information, security, standardization and traceability are among the main advantages sought by the various trading partners.

For suppliers:

The system automates the purchase order management process:

  • The system receives the electronic order from the company’s ERP and transforms into an importable data structure.
  • The order data is integrated into the management system.
  • The customer is automatically informed of the correct receipt and processing of the order.
  • Electronic invoices are generated automatically from order information.
  • Better processing of information.
  • Reduction of errors.
  • Improved customer service.
  • Reduction of the debt collection cycle thanks to the automatic sending of the invoice upon receipt of the order.
  • Reduction of processing and archiving costs.
  • Elimination of paper.

To the customer :

  • Automation of order generation in EDI format from ERP data.
  • Receipt of notifications warning of the receipt and processing of the order.

Also Read: Electronic Document Management (EDM): What Is It For?

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