What are Sales Orders in QuickBooks?

Learn about Sales Orders in QB

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Sales Orders - Purchase Orders - What's the Difference?

Purchase Order = P.O.
Sales Order = S.O.

Do you know what P.O.s are? If so, then it's very easy to understand what S.O.s are.

P.O.s:

  • Are detailed requests for goods or services that a company sends to one of it's vendors.
  • Do not post to the General Ledger or effect financial reports such as the Balance sheet or Profit & Loss statement.
  • Show the exact quantities of specific goods to be purchased, as well as the expected purchase price, shipping, and sales tax.
  • The prices might change as per your vendor's current prices.

Now, put yourself into the position of the company receiving the P.O. That's a S.O.

S.O.s:

  • Are detailed requests for goods or services that a company receives from one of it's customers.
  • Do not post to the General Ledger or effect financial reports such as the Balance sheet or Profit & Loss statement.
  • Show the exact quantities of specific goods to be sold, as well as the sales price, shipping, and sales tax.
  • The prices you receive from your customer might not be accurate (in the form of the P.O. you received from them). Make sure your customer understand the correct price before the transaction progresses much further.

If you scroll through the Chart of Accounts and locate Sales Orders and Purchase Orders, you will see that their type is "Non Posting." This is an official accounting term that means, "Does not effect financial statements."

Why Use S.O.s?

  • Do you order specific goods for specific customers?
  • Do you need to postpone reporting the revenue for your sales, but still need to input sales information into QuickBooks?
  • Do you want to order goods from your vendors for specific customers, before the sale is recorded on the books?

If you answered Yes, you need QuickBooks Premier or QuickBooks Enterprise Solution.

Other Benefits of S.O.s

S.O.s can be turned into P.O.s for your vendors with a few clicks of the mouse. If the Items in the Item List are entered correctly, QB records the correct sales price on the S.O. as well as the correct purchase price on the P.O. Then, when it's time to show the sale on financial reports, convert the S.O. to an Invoice.

What's the Difference Between a S.O. and a Pending Invoice?

QuickBooks Pro and Premier both offer Pending Invoices. Like S.O.s, Pending Invoices do not effect financial reports. Here's where they differ:

  • S.O.s can be emailed from within QB. Pending Invoices cannot.
  • Sales Orders enable QB to track backorders. Pending Invoices do not.
Need Help with Sales Orders? Contact Jennifer

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