A sales order is simply a document used by businesses to record transactions with customers. It contains information about products sold, prices charged, payment terms offered, and shipping details. A sales order includes all the necessary information needed to complete a sale transaction between two parties: buyer and seller. For example, if the product you sell is a widget and you sell online, then you would need to have a sales order created so that buyers could place their orders. Once they do, you send out invoices based on the amount paid per widget. If you are selling more than just widgets, then you may also want to use other types of documents, including vendor bills of lading, delivery tickets, packing slips, and more.
How to Use the Sales Order Option
It is important to know that Sales Orders are only available in QuickBooks Desktop Premier and QuickBooks Enterprise versions. But if you have one of those versions, you’ll be able to use the sales order tool to save time and manage your inventory more efficiently.
To turn on the Sales Order feature once you are in QuickBooks, go to the Edit menu and click on Preferences. Select Sales & Customers and then go to the Company Preferences tab. From there you can select the Enable Sales Order checkbox and then click OK.
Go back to the QuickBooks Home screen or the Customers menu and click on Sales Orders/Create Sales Orders. You can select a customer or customer job from the Customer: Job drop-down, or Add New if your customer is not on the list. Fill in the form with relevant customer and sales information. If you select or add an item you already have in QuickBooks, then the description and amount can be set to automatically populate when you make your selection. Otherwise, you’ll have to take the time to fill in that information yourself.
You can also create discount items so that when you select them, the discount auto-populates into the Sales Order. To do this go to the QuickBooks Lists Menu and select Item List. Right-click so that an option box opens and click New. In the New Item window, choose the Type drop-down and then click Discount. You can then enter the Item Name or Number, a Description, Sales Tax, and other necessary information for the customer. Then in the Amount or $ area you can enter the discount amount or the percentage of cost savings. Click Save and Close when you are done.
If you provide estimates to your clients, you can also create sales orders from those estimates. Just find the correct estimate and click Create Sales Order at the top of the estimate form. You can then edit the information if needed before clicking Save & Close.
QuickBooks has a great visual tutorial for how to create Sales Orders from scratch, so check that out if you get stuck.
How Sales Order Stages Update Your Inventory Levels
The other thing to know about creating Sales Orders is that it can update your inventory items’ stock level based on the stage of the Sales Order. This is a great way to keep track of product inventory.
Stage 1 is the Draft stage. Some users choose to bypass this, but it can be helpful if you want to use a Draft as an estimate sheet for a customer. Creating a draft will not affect your stock record. Stage 2 is Active, where you have assigned stock to an order but it has not been deducted from your stock yet. On an Active Sales Order click Finalize to move to the third stage which is, of course, the Finalized stage or Stage 3. From here you can start fulfilling your order, which will mark the stock as committed but not yet deducted from your total. Stage 4 is Fulfilled, which is when you ship the order and your stock will update to show the reduction in inventory values. This inventory tracking method ensures that you aren’t still counting inventory that is already out of your warehouse and in the shipping process.
Using the Sales Order Stages is one of the best inventory tracking models and an excellent way to keep an accurate count of your inventory quantities. Using this tool will help you make the most cost-effective business decisions because you will always have an accurate count of your product inventory values.
Integrating Your e-Commerce Channel with Your Sales Orders
QuickBooks Commerce allows you to integrate your e-Commerce with QuickBooks so that you have a central hub from which to manage your orders. The way this is managed will be different based on your e-Commerce channel. Whether you deliver your product through a B2C or B2B e-Commerce channel, an Online Marketplace, a Consignment Location, or a Point of Sale System, QuickBooks can integrate with those systems so that your records sync up and your inventory tracking methods stay accurate.
QuickBooks has tutorials for each of the above e-Commerce channels so no matter how you’ve set up your sales, it only takes a few steps to integrate these channels with QuickBooks Commerce. And while QuickBooks Commerce may be a better choice for larger businesses, it is a good idea to see what solutions it offers when you are ready to scale up.
How to Use the Sales Order Fulfillment Worksheet
QuickBooks provides a Sales Order Fulfillment Worksheet to give you a simplified process for reviewing all aspects of the sales order. To get started, go to the QuickBooks Edit menu and click on Preferences. On the left side, click on Items & Inventory and then go to the Company Preferences tab. Click on the Advanced Inventory Setting button and then go to the Site Operations tab. From there, check the Sales Order Fulfillment Worksheet box. Now you can start managing and fulfilling your sales orders by selecting the Customers menu and then the Sales Order Fulfillment Worksheet.
The Sales order Fulfillment Worksheet has three tabs, titled Dashboard, Pick, and Pack. On the Dashboard tab, you can see an overview of your sales orders and their statuses. You can also perform actions from the tab, such as Send for Packing or Print Shipping Label. You also have the ability to sort each column within the Dashboard. The Pick and Pack tabs allow you to manage your picklist and your packing orders.
You can also choose between one of three processes for fulfilling sales orders. The process that is best for you will depend on how big your company is, your sales order volume, and your operations. Your options are: 1. Pick, Pack, and Ship, 2. Pick and Ship, and 3. Ship. Again, QuickBooks has a great visual training page for setting up and managing these workflows so you can find the perfect solution that fits your small business needs.
When you know how to manage Sales Orders in QuickBooks, keeping your sales records straight is easy. When you need support in managing all your financial statements during tax time, Sound Accounts is here to help.
