Sales Orders is a feature found in the Premier level of QuickBooks only. The sales order creates a non-posting transaction. Like an estimate or purchase order, you can create as many sales orders as you like, delete and edit them regardless of date. Since they don’t affect any of your accounting numbers, these kinds of changes cannot do any harm.
A sales order will keep a record of an order placed by a customer that is not yet ready to invoice. In common, everyday use, they track backorders and special orders.
The first step to using sales orders is to be sure the preference is selected, allowing the feature to be turned on.
A sales order form appears much like an invoice. The popup message in QuickBooks that warns of insufficient quantities works on sales orders just as it does invoices.
The above screenshot shows the perfect scenario for using a sales order. The customer is ordering a door that is not in stock.
Selling into negative inventory, that is, selling inventory not actually on-hand, can have very adverse affects on QuickBooks as it tries to cost out the products sold. Really, it should never be done.
But since a sales order is a non-posting document, we can sell as much non-existing inventory as we want. It’s not really a sale, it’s an order. It will be turned into a sale later when we have sufficient stock to fulfill the order.
The sales order shown in the screenshot can be completed with the quantities the customer wants to purchase. The company will ship when quantities are available.
The Inventory Stock Status reports take into account the amounts on order when computing the Available number. In this instance, the internal wooden door has an available quantity of negative 1.
Looking at the screenshot, you can see that QuickBooks shows the on hand quantity as zero. Are there any on sales orders? Yes, there is one and that is subtracted. Amounts saved for builds of assembly type items are also subtracted to arrive at the available quantity. Any amounts on purchase orders are shown for informational purposes.
Reports also exist in QuickBooks to track outstanding orders, either by customer or by item.
Once Rock Castle Construction has received a shipment of the interior wood doors, we can fulfill our customer’s order. Normally, we would view one of the sales order reports and double click on the Kristy Abercrombie order to bring up the sales order.
In the above screenshot, the sales order created earlier is shown. Highlighted on the ribbon is the icon that will allow us to create the invoice from this document without a lot of repeat manual entry.
If this sales order had multiple lines with different products, it would be possible to create the invoice for only some of the products. QuickBooks would keep track of what items had been invoiced and which had not, making it possible to fill one sales order with multiple shipments.
This screenshot is the message QuickBooks will pop up allowing the user to select only some of the products, or less than the full quantity of a product to invoice. The sales order will remain open and available to be filled until all the items are invoiced.
In our case, only one door was ordered. The screenshot above shows the invoice created from the sales order reflecting the one item the customer ordered. The invoice can be completed the same as any other and can be treated as any other invoice from the moment of its creation forward.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330