Can we process orders received on the phone?

Yes, we have the option of "Add Order" under the orders section of our admin. You can manually create orders and fulfill them from the back-end. The process to be followed is somewhat like the following:

Click "Add Order >> Select items that are a part of the order >> Select from existing or add new customer >> Enter details of payment and complete the order. 

There after, the process remains the same. You can then ship the order, print the shipping label, generate invoice etc.