A sales order is a document created by the seller to record a customer’s order. It lists the products, quantities, prices, payment terms and delivery details the seller has agreed to supply. In wholesale distribution, the sales order lives in the ERP and tells the warehouse what to pick and ship and tells finance what to invoice.
A sales order is usually created in response to a customer’s purchase order. The customer’s PO says “this is what we want to buy.” The seller’s sales order says “this is what we have agreed to sell you.”
What a sales order includes
A typical sales order contains:
- Sales order number for internal tracking
- Customer details such as account number, billing and delivery address
- Customer PO number so both sides can match records
- Line items with SKU, description, quantity, unit of measure and price
- Discounts or promotions applied to the order
- Delivery date and shipping method
- Payment terms such as net 30
- Special instructions like delivery windows or dock notes
Sales order vs purchase order
| Purchase order | Sales order | |
|---|---|---|
| Created by | Buyer | Seller |
| Purpose | Request goods | Confirm and record the sale |
| Lives in | Buyer’s system | Seller’s ERP |
| Uses the | Buyer’s item codes and descriptions | Seller’s SKUs and pricing |
| Triggers | The seller’s order process | Picking, shipping and invoicing |
One of the biggest jobs on the order desk is turning the customer’s purchase order into an accurate sales order. The customer may use their own product names or item codes, order in different units, or quote old prices. Each difference has to be resolved before the sales order is correct.
The sales order process
- Receive the customer’s order by email, fax, PDF, phone, text, EDI or portal.
- Check it against the catalog, customer pricing and stock.
- Resolve any problems with the customer.
- Create the sales order in the ERP.
- Send an order confirmation or PO acknowledgement to the customer.
- Fulfil the order, then convert it to a delivery note and invoice.
The sales order often sits alongside an order management system, which tracks it through fulfilment. This article on how an order management system fits with your ERP explains how the two work together.
Sales order statuses
Sales orders usually move through statuses such as:
- Draft or pending: created but not confirmed
- Confirmed or open: accepted and waiting to ship
- Partially shipped: some lines sent, others on backorder
- Shipped or fulfilled: all lines sent
- Invoiced or closed: billed and complete
- Cancelled
Common sales order problems
- Items matched to the wrong SKU
- Quantities entered in the wrong unit
- List price used instead of the customer’s contract price
- Missing lines from long or messy purchase orders
- Orders left in draft because an exception was never resolved
How Ordana helps
Ordana creates accurate sales orders from whatever the customer sends. The Ordana Desk Agent reads the incoming order in any format, maps the customer’s items to your SKUs, applies their pricing and checks stock.
If anything needs changing, the agent agrees it with the retailer first. It then writes the finished sales order directly into your ERP, including NetSuite, SAP, Sage and Microsoft Dynamics, and sends the customer a confirmation. No draft orders are left waiting for a rep to finish them.
Schedule a demo to see Ordana create sales orders in your ERP.
Frequently asked questions
Is a sales order a legal contract?
A sales order records the agreed terms and, once accepted by both sides, is generally treated as part of the contract of sale. Check your own terms and conditions for specifics.
Is a sales order the same as an invoice?
No. A sales order confirms what will be supplied. An invoice requests payment after the goods are delivered.
Who creates the sales order?
The seller creates it, usually the order desk or customer service team, or an automated system.
Can a sales order be changed?
Yes, until it ships. Changes should be confirmed with the customer.
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