13. Aug 2019 |

What is an Order Confirmation and How it Works

An order confirmation is typically used each time an individual or a business places an order. Sent either by mail or by email, order confirmations have an important role to play.

Order Confirmation
As soon as the order confirmation has been created or written the supplier is legally bound to go ahead and complete the order. (© Pexels)

What is an Order Confirmation?

An order confirmation is a document that is sent from the supplier to the buyer. It confirms that the order has been received and accepted. A document such as this is also used to reassure the buyer that you will deliver the service or product. As soon as the order confirmation has been created or written the supplier is legally bound to go ahead and complete the order.

Why should I Create it?

The supplier of the service or product is not legally required to provide any of their customers with an order confirmation. While this may be the case it is recommended that an order confirmation is created. This is because it ensures that all parties know what is involved and the agreed conditions of the sale.

If an issue should arise the order confirmation will help to clarify an issue. This issue could show which party has not followed through with their side of their deal.

If an order has been agreed to orally it is important that an order confirmation is sent. This ensures that all of the agreed conditions are met and guaranteed.

There are times when sending an order confirmation is crucial. These situations include:

  • If a non-binding agreement was made in relation to the manner or time of delivery. The order confirmation will need to outline the terms of the agreement/offer.
  • If the buyer placed an order before they received a corresponding offer.
  • If the supplier has made different offers to the buyer
  • If the customer responded to an offer a little too late or they haven’t noticed that the offer has expired.

If you have a new customer, it is essential that you create an order confirmation. This will ensure that any misunderstandings are dealt with or avoided altogether. It also shows the buyer that they are buying a product or service from a professional organisation.

How to Create it

When creating an order confirmation, you need to ensure that it is created professionally. You may be interested to know that an order confirmation has a lot in common with a purchase order.

When you make an offer to a buyer that they accept your order confirmation should show:

  • Your company’s logo and name and address
  • The buyer’s name and address
  • The date of the order and the order number
  • If an order’s been made due to the buyer accepting an offer you will need to include a reference to the offer. Simply add the offer number.
  • Your thanks to the customer for placing an order
  • A list of the services or product that have been agreed on
  • Any information that is deemed relevant such as quantity, description, or price

You will also need to make sure your order confirmation contains:

  • Delivery information or when the service will take place
  • Payment conditions
  • Delivery conditions
  • Postage and packaging costs
  • Details on rights of use, proprietary rights and the delivery location
  • A reference to the terms and conditions

Order confirmations can help the buyer and the seller to agree on the terms of the sale or the supply of a service. They give the buyer more confidence in you and they encourage them to see your business in a more professional manner.

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