Turn a customer's order into cash

A customer's request becomes a released Sales Order, the goods leave stock on an Item Issue To Sales Order, the customer is billed on a Customer Invoice and pays on a Collection. Sales writes the order; Inventory moves the goods; Receivables posts the money.

Phase

Daily work

Who

Sales staff quote and take the order; the warehouse picks and issues; accounts invoice and collect

How often

Per order

Screens

Sales Quotation, Sales Order, Picking List, Item Issue To Sales Order, Customer Invoice, Collection; for exports Outbound Shipment; for returns Return Order, Sales Return, Customer Invoice Memo

What it is for

Every sale goes the same way, so stock, revenue and the customer's balance agree. Each document refers to the one before it, line by line: the issue can only issue what the order has left, the invoice only bill what was issued and not yet billed.

The one rule people get wrong: the order must be released. A Sales Order saved as a draft is not offered to the warehouse. The credit check runs on the Save that releases. See Sales Order.

Before you start

• The company's Sales and Distribution Setting: the Delivery Process (issue from the order or from a picking list) and whether the issue invoices by itself.
• Customers released in the company with pricing group, payment term, tax zone and credit limit, on Release Customer In Legal Entity in Receivables. The credit check reads the customer's Credit Rule.
• Items released in the company with sales unit, price and stock: see Item In Legal Entity and, for how the sales price is found, Pricing Profile.
• Posting profiles and tax in General ledger: Posting Profile, Tax Zone and Tax Group.

The process at a glance

#	Screen	Who	What you do	What it creates
1	Sales Quotation	Sales	Offer; generate the order when accepted	A quotation, then a draft Sales Order
2	Sales Order	Order desk	Enter or check the order, Save to release	A released order; reservations; a plan for made-to-order items
3	Picking List, in Inventory	Warehouse	Pick the order lines, when the Delivery Process says so	A picking list
4	Item Issue To Sales Order, in Inventory	Warehouse	Issue the goods against the order or the picking list	Stock out; the invoice too, when auto-invoicing is on
5	Customer Invoice, in Receivables	Accounts	Bill what was issued	The customer's receivable and the revenue
6	Collection, in Receivables	Cashier	Receive the payment	The customer's balance cleared

Steps

1. Open Sales Quotation (optional). Offer the items, release the quotation, and when the customer accepts use the next action to generate the Sales Order.
   • Only priced lines and quantities not yet ordered come across; one order per site and project.
2. Open the Sales Order, or enter it directly. Check customer, site, warehouse, lines, prices and totals, and Save to release.
   • The credit check warns or refuses. Lines set to reserve take stock or purchase order quantity.
   • Promotions offer their free lines. Made-to-order items can plan production.
   • From here, Delivery Stop, Invoice Stop and Prevent Partial Delivery control what follows.
3. Pick on the Picking List in Inventory, if the Delivery Process is through a picking list.
4. Issue on Item Issue To Sales Order in Inventory. See also How do I deliver goods to a customer? The issue refuses a stopped line, a partial quantity on a Prevent Partial Delivery line, and more than the line has left, unless Accept Over Delivery allows the item's over-delivery percentage.
   • With Sales Delivery For Local or for Export ticked, the Customer Invoice is raised by the issue.
5. Invoice on the Customer Invoice in Receivables, unless the issue raised it. An order with Invoice Stop is refused.
6. Collect on the Collection in Receivables. An advance asked on the order can be collected before delivery; the order shows it as Prepayment Cleared.

What posts

Document	When	What it posts	Where the accounts are set
Sales Quotation, Sales Order	Never	Nothing
Item Issue To Sales Order	Save	The stock movement out, and its entries	What posts in inventory
Customer Invoice	Save	The customer's invoice entries	What posts in receivables and the Posting Profile
Collection	Save	The payment entries against the customer	What posts in receivables

Undoing a posting is Reverse on the toolbar of that document, latest first: the collection, then the invoice, then the issue. The order itself has nothing to reverse.

What happens

• The order's delivered and invoiced status is worked out each time the order is saved.
• The quotation becomes Won when every line is ordered.
• Master Planning plans follow the order's quantities each time it is saved.
• Open orders, sales registers and the Sales board reflect each step; see Lists, reports and board.

How the variants differ

	Local sale	Export sale	Customer return
Order	Sales Order	Sales Order to a customer marked foreign	Sales Order of type Return Order, with a Return Reason
Between order and stock	Picking List, if set	Outbound Shipment: declaration, vessel, bill of lading, assessable values	Nothing
Stock moves on	Item Issue To Sales Order	Item Issue To Sales Order, against the shipment	Sales Return, against the Return Order
Billing	Customer Invoice, raised by the issue when Sales Delivery For Local is ticked	Customer Invoice, raised by the issue when Sales Delivery for Export is ticked	Customer Invoice Memo, raised by the return when the setting has a Memo Journal
Old balances	Sales Order Closure	Closure counts what was shipped

Two further variants start earlier: bookings on Sales Order Journal become Sales Orders on approval; a customer that is a sister company gets its Purchase Order created by the Sales Order.

Common mistakes

• The warehouse cannot find the order. It is still a draft, or it has Delivery Stop, or the issue is looking at another site or warehouse.
• "This customer has exceeded their credit limit ... This Sales Order cannot be saved." The customer's credit action is Stop. Collect first, or raise the limit on Release Customer In Legal Entity.
• The invoice is refused with "Invoice has been stopped for Sales Order". Invoice Stop is ticked on the order.
• No automatic invoice appeared. The auto-invoice switch for that kind of customer is off, the line is already invoiced, or it is a free line not meant for invoicing.
• The order cannot be deleted. A picking list, issue, shipment, return or plan refers to it; reverse those first.
• Prices changed on Save. The order has a Pricing Group, and Save prices from it.

Related screens

• Sales Quotation - the offer.
• Sales Order - the order and the return order.
• Sales Order Journal - bookings before orders.
• Outbound Shipment - exports.
• Sales Order Closure - closing old balances.
• Sales and Distribution Setting - the switches that shape the process.
• Picking List, Picking List Registration, Item Issue To Sales Order, Sales Return and Delivery Return - picking, issue and return, in Inventory.
• Customer In Legal Entity, Credit Rule, Customer Invoice, Customer Invoice Memo and Collection - the customer, the invoice, the memo and the payment, in Receivables.
• Cash and bank - where the money lands. For collections by cheque, see How do I clear a cheque?. Sales targets are kept on the Sales Budget.
• Lead in CRM - before the order: the lead.
• Plan to produce - make-to-order items planned from the order; Procure to pay - the purchase side, including the sister company's Purchase Order.
• How do I make stock lines name a storage location? - when the warehouse keeps bins.
• Service work is billed through its own order: see Service Order and the service and maintenance tasks.
• Real estate units sold on instalments follow their own agreement and billing: see How do I sell a unit on instalments?.
• How do I take a sales order? and the other sales tasks.