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What Is a Sales Order in QuickBooks and How Can it Help Your Business?

The Premier and Enterprise versions of QuickBooks have a feature called sales orders that can end up being very beneficial and a great time-saver for many businesses:

Sales Order Button

An easy way to think of a sales order is this - it is a document you can use in QuickBooks to track a customer order that is in-house that hasn't shipped yet. For example, let's say you had to special order some parts for a customer that aren't going to arrive for four weeks. You can use the sales order form in QuickBooks to keep track of this customer order while you are waiting for the parts to arrive. Even better, you can turn this sales order into an invoice when you are ready to ship with just the click of a button - no re-typing needed!

If you notice in the screen shot of the QuickBooks home screen above, the sales order sits between the estimate and the invoice. You can create an estimate, and then when the customer wants to order, turn the estimate into a sales order (again with just a click). Once the order is built and/or is ready to ship, you can then turn the sales order into an invoice. The use of sales orders is completely optional, but can be a huge time-saver.

More benefits of using sales orders in QuickBooks Premier or Enterprise:

  • Consolidate multiple customer orders into one invoice - you can choose from a list of sales orders for a given customer, click OK and have them all consolidate into one invoice.
    Sales Order Consolidation
  • Create partial invoices -a sales order is the perfect tool to use for tracking partial shipments. If your customer has ordered 150 widgets and you can only ship 60 of them right away, create a sales order for the 150 widgets and then invoice for the 60 that are shipping now.
  • Tracking backorders - in the example above, you have a backorder of 90 pieces. The sales order is the perfect place to track it until it has shipped completely. (Hint: Go to Reports > Sales > Open Sales Order by Customer report) for easy tracking
  • Using the sales order fulfillment worksheet -Once you begin using sales orders in QuickBooks, you can then take advantage of this feature. It is a great way to assess all of your open orders in one place and it can help you make decisions on what to ship and what not to ship. Please see my related article on the sales order fulfillment worksheet for more details.

Don't mess around trying to "trick out" estimates in QuickBooks Pro trying to get them to behave like a sales order does. I've seen some real doozies that have been created in QuickBooks Pro to get estimates to mimic sales orders. Use the sales order feature instead - you'll find it very easy to use.

If you see the benefits of using sales orders and need to upgrade, be sure to save some dough and get a discount on Premier or Enterprise. Remember, all your data in QuickBooks Pro will upgrade to Premier or Enterprise, so you won't have any headaches there.

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Comments

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Hi Sharon:

Everything in QuickBooks is reported based on the date of the transaction.

For example, if you post an A/P bill for September 2013 (and pay it in October), it will be reported in September if you run your reports on an accrual basis and in October if you run your reports on a cash basis.

Sales orders do not post to your accounting at all - you can show a deposit received, but it is for information purposes only.

If you'd like to take a closer look at the particulars of your situation, here are some options:
http://blog.betterbottomline.com/Coaching/Scott_Gregory_QuickBooks_Services.pdf

Scott Gregory

If I have an open SO that I am entering AP, for that particular job, in a different month than when I actually convert it to an invoice does it "book" that AP and apply it to the income statement when it is converted to an invoice? I run a window installation company so sometimes we may receive a contract along with a deposit in one month then get the bill from the vendor in that same month but not complete or invoice the job for a month or 2. One more question... can you apply a customer deposit to a SO

Hi David:

The sales order form itself will always remain in QuickBooks, since it is a transaction just like an invoice.

If you invoice completely from the sales order, the sales order itself should then automatically "close" itself. By doing that, it will no longer appear on open sales order reports, etc.

If it does not close automatically for some reason, you have to return to the sales order in question and manually click the "closed" button to get the same result.

However, after doing all of the above, the sales order itself still stays in QuickBooks as it should for historical purposes.

Does this help?

Scott Gregory

I know this is an old thread but in case you still monitor it, I have a question. I use SO a lot and like the feature in QB, except that I would expect the SO to disappear once it is fully invoiced, but it does not. How do you get rid of fully invoiced SOs?

Many thanks,
David

Tracy:

You would have to customize the sales order to allow this to work - it can be done.

Scott Gregory

Can we change the form of the sales order to read service call at the top?

What Is a Sales Order in QuickBooks and How Can it Help Your Business?<-- interesting!

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