Prior to reading this article, we recommend you read the following article:
The Billing for Inventory Map covers the process for creating sales orders, allocating inventory from stock, billing customers and processing a return from a customer when an inventory product is involved. Please see the basic Billing Map article for the processes related to recognizing revenue and receiving payment from a customer.
Use this article to learn more about the following:
- Create a Sales Order
- Allocate a Sales Order
- Ship a Sales Order
- Purchase Product from a Sales Order
- Create Billings
- Restock a Returned Product
Create a Sales Order
A Sales Order is a data record that creates demand for a product in Accounting Seed. A Sales Order is not intended to be a quote or potential sale. Instead, we recommend that you use the Salesforce Opportunity object to do that.
A Sales Order can be created directly from an Opportunity or the Field Service Lightning Work Order in Salesforce by clicking a button. However, it is not mandatory to start with an Opportunity or Work Order; you can start with a Sales Order (see Create a Sales Order).
Allocate a Sales Order
If a product is in stock you can allocate the inventory from stock to the specific sales order. This action takes the inventory out of the available quantity by creating a Sales Order inventory movement related to the specific sales order line (see Allocating Inventory to a Sales Order). When allocating a sales order, the transactions entered into the general ledger contain entries for recording the cost of goods sold incurred from the product sales. The related cost of goods sold expense is recorded upon allocation of the sales order in the Sales Order Inventory Movement.
To record the cost of goods sold a debit entry is always made to the Expense GL Account set in the product. The credit is made to the Inventory GL account set in the product.
If a product is a kitted product a separate debit and credit for each product part in the kit will be created to record the expense and decrease in inventory upon posting the billing.
If a product is serialized then a separate Sales Order inventory movement will be created for each unit allocated. You are able to record serial numbers directly on the Sales Order inventory movements to record which specific products were sent to your customer.
If the Inventory Asset checkbox on the product master record is checked then an Asset record in Salesforce will be automatically created and assigned to the account. This is used to allow sales and support staff to view the status of the asset as well as any service history recorded for maintaining or replacing the asset.
Ship a Sales Order
After a Sales Order has been allocated it can be shipped. A Sales Order can have multiple shipments if there are multiple allocations for the order or if it has serialized products. Shipping the Sales Order does not affect the general ledger or inventory quantity available balances. Shipping the Sales Order records the status of the product for order management and fulfillment.
Purchase Product from a Sales Order
If you wish to purchase products for a specific Sales Order or create a Drop Ship Purchase Order for a Sales Order you can create a Purchase Order(s) for an individual or group of Sales Orders. Accounting Seed will default the purchasing quantities based on the unallocated order quantity of the Sales Order(s).
A billing is a customer invoice and is typically created from either the Opportunity or Sales Order when an inventoried product is being sold. Once a billing is created, it is posted.
When posting a Billing that contains an inventoried product, the transactions entered into the general ledger contain entries for recording the revenue earned from the product sales. The related cost of goods sold is recorded upon allocation of the sales order in the Sales Order Inventory Movement. See Allocate a Sales Order above.
To record the revenue a debit entry is always made to the Accounts Receivable Control GL Account set in Accounting Settings. The credit is created to the GL account used on the billing line labeled Revenue GL account. This will default to the Revenue GL account set on the product.
Restock a Returned Product
Customer returns with inventoried products work the same as non-inventoried products and are shown in the Billing Map. The only difference in processing a return when a product is inventoried is that an additional step to record the restocking of the product is made via an Inbound inventory movement.
The Inbound inventory movement is an accounting type movement and will record a debit to inventory and a credit to cost of goods sold or another expense GL account of your choice. More information on Product Returns is available in the Cash In section of the knowledge base.
- Flowchart has been updated.