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. Select the Company Preferences tab to open that window.
Figure 1: 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 requires additional setup and some new processes. . 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. Select the Sales Orders icon on the home page, or open the Customers menu and select Create Sales Orders.
Figure 2: A sales order in QuickBooks looks much like an invoice.
Select 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 optional in QuickBooks. Templates provide alternate views of forms containing different fields and perhaps a different layout. Classes are like categories. You create them to track profit centers in QuickBooks, and they provide another method of reporting . Talk to us if you don’t understand these concepts.
If the shipping address is different from the customer’s main address, select the down arrow in the field next to Ship To, and either select an alternate you’ve created or select <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 within 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 have not setup sales tax tracking before and we can help you.
When everything is correct, save the sales order. When you’re ready to convert it to an invoice, open it and select 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.
Figure 3: 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.