Glossary
What is Sales order?
A sales order is a confirmed request from a customer to buy goods, recorded after a quotation is accepted but before delivery and billing. It records what the customer has committed to, so orders agreed but not yet invoiced can be tracked and planned.
A sales order is the customer’s yes, written down before the goods go out. It turns a price agreed on the phone or in a quotation into a document the godown can pick from and the billing desk can invoice from.
How it works in practice
As an example, a distributor’s sales rep visits a kirana shop in Bhaktapur and takes an order for 20 cartons of noodles, 10 of biscuits and 5 tins of ghee, on credit, for delivery on Thursday. The rep records a sales order with the customer, the items, the agreed rates, the delivery address and the payment term. On Wednesday the godown picks from that order. On Thursday, once the goods are loaded, the order is converted into a tax invoice. That invoice, not the order, is what reduces stock and creates the amount the shop owes.
If only 16 cartons of noodles are on hand on Wednesday, the order is where that shows up, before the truck leaves rather than at the shop door.
How it differs from a quotation and an invoice
A quotation is an offer the customer has not yet accepted. A sales order is an accepted order that has not yet been billed. A tax invoice is the sale itself: it carries the sequential number, reports the VAT, moves the stock and creates the receivable. The same step on the buying side is the purchase order.
Common mistakes
- Billing from a phone note and skipping the order, so the delivery and the bill disagree.
- Counting open orders as sales. Until the invoice is raised, no sale has been recorded.
- Assuming an order sets the goods aside. In most systems two orders can both be promised the last carton, and whoever invoices first gets it.
- Leaving withdrawn orders open instead of voiding them with a reason.
Where it matters most
Wholesalers and FMCG distributors taking repeat orders from shops, hardware and building-supply yards delivering to sites, electronics dealers supplying resellers, and manufacturers selling finished goods on terms. A counter shop billing walk-in customers rarely needs one.
In Kuver Books, a sales order moves through draft, pending, approved and completed, and an approved order converts into a tax invoice with every line carried across, as the sales order workflow help page explains. Stock is reduced when that invoice is approved, not when the order is.
Glossary
Every billing and tax term, A to Z.
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