GPI 071 – Financial statistics – track your customers’ new sales orders received.

Your business may have no delay between getting an order and shipping that order out to the customer.  Some companies experience months of delays between the two events so it is necessary to track both.  Materials take time to order and processing orders requires scheduling labor, outside services and takes more time.  Some firms have a delay between orders in and shipments out.  Track new orders received because it forewarns you of coming problems as well as upcoming growth periods.

When you track incoming sales orders, count the sales value that the customer puts on his purchase order.  You may get change orders later that boost this value but you cannot count them until you have signed orders in your hands.  Add up all of the orders you received yesterday from all of your profit centers and chart it.  You can track this dollar amount of sales orders by profit center, sales representative, customer, sales region, industry, order or transaction size or whatever is appropriate.  Track new incoming sales orders by sales representatives for example.

Who has the most orders?  Which customer is giving us orders?  Maybe more importantly, which ones are not?  Which sales person is ahead and more importantly, who is behind and why?  Show previous months information and ask are the results getting better or worse?  If seasonal tracking is better or more appropriate, show a history of previous fourth quarters, or previous Julys, or appropriate corresponding periods of time.  Compare today with previous periods to get a sense of where the market is headed.

Change charts as trends dictate or when other issues become more important.  Do not track one element and miss a complete change in the market.  Change the chart anytime a different perspective clarifies the issue.  Charts are not set in stone so be flexible when necessary.  You can add different charts to catch trends that some charts may ignore or miss.

The key thing to watch is the MTD (month-to-date) sales orders received versus MTD net sales or shipments out the door.  When incoming orders are lagging shipments out, you must stir up the sales department.  When sales orders are accumulating higher than the dollar amount going out the door, check on production and see what the lag is.  Someone needs to be working on scheduling because you do not want a long-term problem of longer delays in shipments because your sales staff has been too successful.  Post this chart of incoming sales orders next to the month-to-date net sales chart.  This will tell you who is running behind and may need assistance.