The sales process moves from issuing a sales quotation for goods to selling the goods (and services) to delivering the goods to invoicing the customer for the goods. Each step involves a document, such as a sales order or A/R invoice. SAP Business One moves all relevant information from one document to the next in the document flow. You can adapt the steps according to your needs and business processes.
To avoid problems during document creation in later stages of the sales process, make sure that the following key data is maintained correctly before you start creating sales documents:
- Business partner master data, especially the customer’s bill-to and ship-to address, payment terms and dunning parameters
- Item master data
The sales process in SAP Business One entails creating the following documents:
1) Sales quotation
Before ordering, customers often require a sales quotation for review in their company. You create it as a proposal of your goods and services to a customer or lead. It does not result in any posting that alters quantities or values in inventory management or accounting.
2) Sales order
The sales order is a commitment from a customer or lead to buy a product or service. The document is important for planning production, creating purchase orders and scheduling resources.
You create a delivery note to indicate that the goods have been shipped.
4) A/R invoice
After you have delivered the goods or provided services, you bill the customer using an A/R invoice. With this document, you request payment from your customer and record the revenue in the profit and loss statement.
Note: The invoice is the only mandatory document in the sales process. You can create one without first creating the other three.
For legal reasons, you cannot delete deliveries and A/R invoices or change any accounting-relevant data on these documents if they have been already entered in SAP Business One.
Additional Process Documents
Each of the following documents has a specific purpose in the sales process.
- A/R reserve invoice – used when a company is concerned about the credit worthiness of its customer. In this case, the company demands payment before any delivery of items to the customer.
- Return – a corrective clearing document used to credit a customer if the goods were delivered but no A/R invoice was issued
- A/R Invoice + Payment – document for cash sales to one-time customers. SAP Business One treats an A/R invoice + payment document the same way as an A/R invoice. The corresponding journal entries in accounting and inventory are processed automatically after the document is posted.
- A/R credit memo – used to credit a customer if the goods were delivered and an A/R invoice was issued
It is possible to create new documents based on existing ones. When you do so, only the documents that are still open are displayed. Open documents:
- Are those for which you have not created a follow-on document
- Remain open until you transfer all items completely to the follow-on document, or until you manually close or reverse them
Effects on inventory quantity and the general ledger
Each document updates the inventory quantities and the general ledger in the following ways.
- A sales order affects the amount of inventory committed to a customer and, therefore, the available inventory quantity.
- A delivery reduces the inventory committed and the in-stock quantities. Furthermore, it affects the general ledger, if SAP Business One manages the perpetual inventory. In such a case, the delivery reduces inventory valuation and posts a cost of sale.
- An A/R invoice created without reference to the delivery, also reduces the quantity in stock. An A/R invoice always creates an accounting transaction. It records the revenue and tax, and it updates the customer accounts with a new outstanding balance.
- An A/R invoice + payment reduces the quantity in stock and records the revenue and tax.
- An A/R reserve invoice affects the amount of inventory committed to a customer and, therefore, the available inventory quantity. It also creates an accounting transaction.
- A return increases the in-stock quantity and updates the associated inventory accounts.
- An A/R credit memo increases available inventory levels and creates accounting transactions. It credits the customer accounts in the general ledger and corrects the revenue account by the same amount.