Order to Cash Process

In this topic, we perform the steps in the sales process from sales order to cash.  As we create each document, we describe the effect of each step on inventory and accounting.

Summary:

1.  Sales orders contain the basic information needed for placing the order, delivering the goods and invoicing the customer.  A sales order has no effect on accounting.
2. Sales orders can be changed after posting as long as appropriate settings are made and the order is still open.
3. A delivery indicates that goods have been shipped and reduces inventory levels.
4. If you are running perpetual inventory, posting a delivery debits current item cost and credits the inventory stock account.
5. An A/R invoice is a request for payment.  When an A/R invoice is posted, a journal entry posts a debit to the customer account and a credit to sales revenue and any tax accounts. You can preview journal entries before they are posted.
6. Incoming payments are the last step in the basic sales process, even though they are a function in banking.

You can also download the document here for your records.