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Understanding Sales Orders

Sales Orders are formal requests from customers to purchase products or services. They are a key step between quotes and invoices in the sales process.

Overview

A Sales Order confirms a customer's intent to buy. It locks in pricing, specifies delivery terms, and serves as authorization to fulfill the order. Once fulfilled, Sales Orders are converted to invoices.

Sales Order Workflow

Draft → Confirmed → Delivered → Invoiced └── Cancelled
  1. Draft: Create and edit the order
  2. Confirmed: Customer commits to the purchase
  3. Delivered: Products shipped or services rendered
  4. Invoiced: Invoice generated for payment

Key Information

Order Header

  • Customer: Who is buying
  • Order Date: When the order was placed
  • Delivery Date: Expected fulfillment date
  • Reference: Customer's PO number or your reference
  • Salesperson: Assigned sales representative
  • Payment Terms: When payment is expected

Order Lines

Each line represents what's being sold:

  • Product: Item or service being sold
  • Quantity: How many units
  • Unit Price: Price per unit
  • Discount: Any discounts applied
  • Tax: Applicable taxes
  • Subtotal: Line total before tax

Delivery Information

  • Shipping Address: Where to deliver
  • Shipping Method: How it will be sent
  • Incoterms: International trade terms
  • Partial Delivery: Allow split shipments?

Creating a Sales Order

  1. Navigate to Sales > Sales Orders.
  2. Click Create Sales Order.
  3. Select the customer.
  4. Add products and quantities.
  5. Set pricing and discounts.
  6. Specify delivery requirements.
  7. Click Confirm Order.

From Quote to Order

If you have an approved sales quote:

  1. Open the quote.
  2. Click Convert to Sales Order.
  3. Review and adjust if needed.
  4. Confirm the order.

Fulfillment Process

After confirmation:

  1. Check Inventory: Verify stock availability
  2. Create Picking: Generate warehouse picking order
  3. Ship Products: Deliver to customer
  4. Confirm Delivery: Mark as delivered
  5. Generate Invoice: Create invoice for payment

Invoicing Options

  • Invoice on Order: Bill immediately upon confirmation
  • Invoice on Delivery: Bill after shipping
  • Milestone Billing: Bill at project milestones
  • Prepayment: Require payment before fulfillment

Best Practices

  1. Verify Stock: Check availability before confirming
  2. Confirm Terms: Ensure customer agrees to payment terms
  3. Document Changes: Track any modifications
  4. Follow Up: Monitor delivery status
  5. Close Loop: Ensure invoicing is complete