Ultimate Guide to Order Management Software

Hello! If you’re here, then the chances are you’re interested in order management. We have over fifteen years of order and customer management experience, and we’d like to share with you some best-practices that we have picked up over the years.

The aims of an order management software system are:

• To accept orders from customers as soon as possible after they are placed.
• To allocate stock correctly.
• To enable an effective “pick-pack-ship” operation
• To ensure that orders are fulfilled and delivered to customers on-time
• To keep the customer informed of the progression of their order
• To enable problems to be identified and resolved quickly.
• To handle returns, exchanges, refunds and complaints.
• To enable successful two-way communication with customers

and, most crucially:

• to provide managers and business owners with reporting and dashboard capabilities, to support and monitor every aspect of Order Management with their company.

A summary of the Order Management process is shown below

Order Management Software

To run a successful on-line retail business, your order management process must be efficient and effective, so that your profits are maximized and protected.

We recommend having a single system to manage all aspects of order management. You should avoid having one system for customer e-mails, another for creating despatch labels, yet another for order management, and so on, as a disjointed approach will result in work items falling through the gaps.

If you have a high-street presence as well as an on-line operation, it is recommended that your POS system and back-office order management system are one and the same – a fully integrated approach.

Multi-Channel Order Import

Most modern-day e-retailers sell through multiple channels – usually a combination of Amazon, E-Bay and a web site (based on Shopify, Magento etc). Orders should be imported automatically from the source systems into your centralised Order Management system, and it Is important that the fields in each source system are as closely aligned as possible, particularly with regard to customer names and addresses.

Managing Despatch Deadlines

Best practice is for each order to have a despatch deadline and a delivery deadline. These will have originated from the source system and will be dependent on your stated ‘Despatch time’ for the item and the customer’s selected delivery method.

It is important that you have visibility of these timeframes within your order management system, ideally with a ‘traffic light’ system alongside each order – green meaning that the order is currently on time, amber means that the despatch or delivery time will be reached during the current day, and red meaning that the time for despatch or delivery has been exceeded. Any order which shows red must be acted upon quickly, as the customer may become unhappy and negative feedback or reviews received by your business. The Order Management System should also be able to escalate ‘amber’ or ‘red’ orders to line managers according to rules configurable within the system.

Allocating stock

Your order management system should allocate stock to the order as soon as the order is placed. Any effective Order Management system will keep your stock sync’d with your live Inventory. More advanced systems can also be configured to display ‘fixed stock’ on a per-SKU basis (e.g. show fixed stock availability of 100 units across all systems) – useful when you know you can get stock quickly from a supplier and still meet your despatch deadlines.

Pick-Pack-Ship process

Once orders have been received into the system, they should be allocated to users to be picked and packed. The system should ideally have rules for this, so that users or teams can be allocated order items depending on warehouse, product line or other factor, and load-balanced so that each picker and packer is equally busy.

The system should create an ordered picklist for each picker. Each individuals’ picklist can be printed, or as is becoming more common now, integrated into an barcode/tablet device. Items can be scanned as they are picked, and any exception (for example any missing/damaged items unsuitable for despatch) noted in the system.

During packing, items should again be scanned, so that the item can be marked as packed. Rules should be set up in your system so that the packer knows what size of letter, box or parcel to use.

Despatch labels should be printed easily and quickly. If you’re using a system such as Royal Mail, multiple thermal label printers can be used, and you should able to print all required labels from your Order Management Software system. Alternatively, despatch labels can be printed on integrated A4 delivery notes, saving paper and adding an additional level of streamlining to your processes.

For carriers such as Royal Mail, production of additional documentation (such as the despatch manifest) should also be as automated as possible.

Once despatched, systems such as EBay and Amazon should be updated automatically to indicate that the item has been shipped. You may also wish to send customers tracking e-mails containing their tracking references.

Customer Communication

Customers can communicate with your business (and vice-versa) in a number of ways, the most popular being through a platform’s messaging system (e.g. EBay or Amazon messages), or e-mail. Dealing with these channels separately can be time consuming and laborious. Many messages will be low-priority enquiries, and you may have to use more than one system to find the relevant order which relates to the message, open it, then reply.

It’s much better to streamline dealing with messages as much as possible, and as such we’d recommend a system which integrates all messages into one central location inside your order management system. This has several advantages:

• Messages from all platforms will be available in one central location, and the system will automatically sort the messages so that those which relate to live orders (for instance those awaiting despatch, or recently despatched) are prioritised. This is vital when the customer requests, for example, a change to a delivery address.
• Lower priority messages, such as product enquiries or questions, will appear lower down in the list.
• Messages are fully integrated with your orders, so that all order details are simply a click away. Messages will also be stored in the audit trail of the order, so that anyone in your organisation can see the complete history of messages. Any attachments which are sent by customers (e.g. photos of a damaged delivery) should also be received directly into the system and attached to the original order.
• Standard templates for message replies will be available, together with mail-merged fields from the order, making replying to customers much quicker. The order reference can be embedded into the message subject, making it friendly to the customer and trackable in the order management system. This can save hours when replying to ‘Where is my order’ messages from customers. It should also be possible to send PDF attachments of VAT invoices (a common customer request) directly from the order.
• If a customer has requested a return, exchange or refund, or made a complaint, then all messages should be attached to the order with a date and time stamp, providing a complete history and audit trail.
• The same message can be sent simultaneously to the customer’s email address and to their e-bay account. This makes it more likely that the messages will not be missed by the customer.
• If there is a problem with the order, for example you may find that you are unable to fulfil the order due to discovering at pick-time that the stock is damaged, or perhaps the stock level in the system was incorrect, then you can pro-actively communicate with customer as quickly as possible, and their reply received directly back into the Order Management System. A visual alert which shows a reply has been received from the customer should be visible against the order.

Automated Customer emails

Customers like getting order emails, informing them the progress of an order. You should configure your system so that these are sent automatically. After despatch, full integration with Royal Mail Business systems allows the customer to be kept informed of their parcel’s status through to delivery..

Lost in Transit

Unfortunately, items do sometimes go astray, so make sure that you have a procedure for handling orders which go missing in transit. You may wish to send a duplicate straight away, or perhaps have a policy for the customer to wait for a few days in case the order turns up. In any case, a single ‘Lost Order’ process screen should be available in your order management system, enabling the order to marked as lost and a replacement item to enter the pick-pack-ship workflow.

Returns and Exchanges

A customer should be able to raise a return request by themselves, and ideally be able to print out a returns label. If not, you may want to send them a returns label and packet in which to place the goods.

If you have a bricks-and-mortar shop as well as an on-line presence, you should be able to accept returns via one channel even if the customer has bought through another e.g. accept a returned store purchase online and vice-versa.

Your order management software must be able to handle returns, and attach the return to the original order with a complete time-stamped audit trail showing the whole process from order being placed to return being received back and a refund issued.
Exchanges are similar to returns, except that an item is being despatched as well as one being received back. Your order management system should make this exchange as simple as possible in one transaction.


Refunds (via Paypal, on-line credit card or other method) should be integrated into your system and be attached to the order so that a complete audit trail is visible.


We recommend running regular reports across all areas of Order Management. A reporting dashboard should be available within your order management software. Key reports to run will include:

Sales Reports
• Top Products, by sales rank
• Profit and Loss, by month
• Daily Sales across each sales channel (E-bay, Amazon, Web etc)
• Sales by Product category
• Sales by geographic region
• Sales vs Target, by product category

Customer Service Reports
• Customer issues logged, closed and currently open, by category and priority.
• Average Response time for customer issues

Internal Operations Reports
• Percentage of Orders despatched on time
• Pick errors (items not present in the warehouse, found to be damaged etc. at pick time), as a percentage of total items picked)
• Daily Pick and Pack rate, by employee
• Percentage of orders returned, showing counts for each reason

All report dashboard items should have date selection, and other criteria depending on the particular report. A drill down facility should also be available so that you can see the underlying data behind any report.