"Sales Order" vs "Invoice"... should I even bother using "Sales Orders"?

I agree about confusion.Can someone explain the purpose of the Sales Order ?

Also, is it possible to create a Purchase order based on an existing Proforma invoice or Invoice, to save re-entering the detail on the purchase order.

I found the answer - I now see there is a drop-down box by "Create Invoice" which allows me to create a purchase order

You could issue a sales order for the items ordered and include all the info regarding delivery. When the customer pays you create and invoice from the sales order then receive the payment.

If you issue a sales receipt then you have created an immediate payment plus an accounts receivable and will have everything double recorded.

Sales receipts are normally used for things that are paid immediately. Say a customer sends you a check with their order or charges it on a credit card. An invoice creates a receivable that the customer then pays later.

We use sales orders/invoices for all orders, even if applying the payment then and there. We do this just because all transactions are standardized.

Thanks for the responses. I am just now starting my clothing line business so I am trying to get everything setup correctly in QuickBooks as I like things to be very organized.

Sorry for my amateurish questions here... but I am confused as to which forms I should be using and how it will effect the way everything functions in QuickBooks.

If I don't use invoices (and use only sales orders instead) then how can I see which customers have unpaid invoices? I can't do that with sales orders can I? I am also going to be using factoring a LOT... can this be setup in QuickBooks to keep record of the factoring???

Considering how my business will function, which forms do you recommend I use?

I am selling my clothing to hundreds of retail shops at wholesale pricing. When the retail shop places an order a lot of orders will be COD and factoring. I was going to send the customer an invoice and then sales receipt when payment is received but now you mention this is not good because it will create double records... how would that create double records?

Thanks for any input....

PS: I just created a test sales order for a customer... and the ONLY way I see how to make QuickBooks indicate that payment was received and to remove the quantity they ordered from inventory is by creating a sales receipt... am I missing something?

A Sales Order is kinds sorta like an Estimate -- it indicates that you are about to order something (for a client/store), but that payment is not required from the client/store yet. A SO is a "non-posting" document. That's a fancy way of saying "FYI Only". It does not affect the books in any way. It is generally used to show the customer what they will be getting, and what they can expect to pay for it (if they should decide to place that order).

Creating an Invoice off of that SO means that they owe you the money, but they have not yet paid in full. Using these is the only way to track Receivables/money owed to you.

Creating a Sales Receipt instead is only for when they pay for a given Order all at once, and do not owe you anything further for the items listed on that document.

Does that help?

EricKei,

Thanks for your response. That definitely helps when you described sales orders as being simply an FYI type of document that doesn't effect the fucntioning of QuickBooks.

So I was correct in my thinking that I must use invoices. Then once I have actually received the payments (whether it be COD, factoring, credit card etc... I can then create a sales receipt).

But somebody else in this thread mentioned they only use invoices/sales orders and NO sales receipts because that will create double records???

I am starting to feel like a moron because I still see no reason for using sales orders. It seems like I could make do with simply using an invoice... and then collect the payment... and then create the sales receipt?

For the person in this thread NOT using sales receipts... how can you specify in QuickBooks then that the payment was received?

PS: I know this stuff isn't complicated... I am just new to QuickBooks and trying to get everything setup best way possible...

You would use a Receipt OR an Invoice on a given order -- not both. As a rule of thumb, if you get 100% payment up front, use a Receipt; otherwise, use an Invoice.

To collect payment due and apply it to an existing Invoice, go to the Customers menu and choose Receive Payments. This will take you to a screen where you can pick the Customer name, payment info (if it's not already in their record), amount being paid, and you will see a list of open Invoices (for the Customer) o which the payment can be applied.

You can also reach that screen from the Customer Navigator. Click the Customer, click New Transactions, and choose Receive Payments.

EricKei,

I see, thanks for the explanation. So I was doing it correctly earlier as I was attempting to use BOTH the invoice and receipts (thus creating double records and a mess). Thanks for clearing it up.. it makes much more sense now.

I just did a test order where the customer owes me $500 but in the invoice I entered that he only payed me $250 so far and I am still awaiting the rest of the payment. But when I entered he payed me $250 the invoice no longer indicated that he still owes me money which is incorrect because he still owes me another $250. Now I just need to figure out how to setup invoices so that the invoice still indicates he owes... and has not finished paying.. right now it doesn't do that...

But do you know how I can delete a sales order I created? It doesn't seem to allow me to delete that... can that not be deleted? I don't want to hide it from view... I want to completely delete that sales order...

Thanks.

PS: I will be using strictly invoices and then once somebody has payed the received payments will be used to update the invoice. No sales receipts or sales orders will be used.. I think thats' the best way to handle it for this business I suppose...

Enter an Invoice for $500 and save it.

Go to Receive Payments, take a payment for $250, and put a check mark next to the Invoice on that screen.

If you open that Invoice, it should say Balance Due $250 at the bottom-right.

You should be able to delete SO's -- you may need to open it and check the Edit menu. Some options like Delete will (intentionally) not appear in the right-click menus, but WILL show up in Edit.

I found how to delete an SO.... it was right in front of me. Don't know how I missed it the first times.

Thanks for the help you provided :)

Glad to help ^_^