What Sales Orders Are and When to Use Them
They’re not as
commonly used as invoices. But if you need them, they’re there.
When
you want to document sales that you can’t (or won’t) fulfill immediately, but
you plan to do so in the future, you can’t create an invoice just yet. This is
where sales orders come in.
You
may never need to create a sales order for a customer. Perhaps you have a
service-based business, or you never run out of inventory. Or you simply don’t enter
an order unless you know you have the item(s) in stock.
But
if you plan to use sales orders, you must first make sure QuickBooks is set up
to accommodate them. Open the Edit menu
and select Preferences, then Sales & Customers. Click the Company Preferences tab to open that
window.
Before you can
use sales orders, you’ll need to make sure that QuickBooks is set up for them.
Sales Orders Are Required
for Some Tasks
There
are a few situations where you must
use a sales order:
- · If you have a customer who orders very frequently, you may not want to create an invoice for absolutely every item. You could use a sales order to keep track of these multiple orders, and then send an invoice at the end of the month.
- · If you’re missing one or more items that a customer wanted, you can create a sales order that includes everything, but only note the in-stock items on an invoice. The sales order will keep track of the portion of the order that wasn’t fulfilled. Both forms will include the back-ordered quantity.
Warning: Working with back
orders can be challenging. In fact, working with inventory-tracking itself may
be problematic for you. If your business stocks enough of multiple types of
items that you want to use those QuickBooks features, let us help you get started
to ensure that you understand these rather complex concepts.
Creating a Sales Order
Creating
sales orders in QuickBooks is
actually quite simple and similar to filling out an invoice. Click the Sales Orders icon on the home page, or
open the Customers menu and select Create Sales Orders.
A sales order
in QuickBooks looks much like an invoice.
Click
the down arrow in the field next to Customer:
Job and choose the correct one. If you use Classes, select the correct one from the list that drops down, and
change the Template if you’ve
created another you’d like to use.
Tip: Templates and Classes are
totally optional in QuickBooks. Templates provide alternate views of forms
containing different fields and perhaps a different layout. Classes are like
categories. You create your own that work for your business; they can be very
helpful in reports. Talk to us if you don’t understand these concepts.
If
the shipping address is different from the customer’s main address, click the
down arrow in the field next to Ship To,
and either select an alternate you’ve created or click <Add New>. Make sure the Date
is correct, and enter a purchase order number (P.O. No.) if appropriate.
The
rest of the sales order is easy. Click in the fields in the table to make your
selections from drop-down lists, and enter data when needed. Pay special
attention to the Tax status. Let us
know if you haven’t set up sales tax and need to.
When
everything is correct, save the sales order. When you’re ready to convert it to
an invoice, open it and click the Create
Invoice icon in the toolbar. QuickBooks will ask whether you want to create
an invoice for all the items or just the ones you select. You’ll be able to
specify quantities, too, in the window that opens.
When you
create an invoice from a sales order, you can select all the items ordered or a
subset.
As
we’ve said, sales orders are easy to fill out in QuickBooks. But they involve
some complex tracking, and you may want to schedule a session with us before
you attempt them. Better to understand them ahead of time than to try to
troubleshoot problems later.
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