Understanding Quotes, Sales Orders, and Invoices

Understanding Quotes, Sales Orders, and Invoices (6421)

There are three kinds of customer transaction windows--quotes, sales orders, and invoices.

• A quote is a proposal. It supplies pricing information to customers, but doesn't have any impact on your inventory or finances. Once the customer is committed to a sale, you can convert a quote into a sales order or invoice.

• A sales order is a firm order that you haven't yet shipped. Because the customer hasn't been billed, dollar amounts on sales orders don't affect your finances. However, item quantities are allocated; that is, the items are reserved for later shipment and the number of items available is decreased. (See "Understanding Item Inventories" in Chapter 5 for more information about how sales orders affect inventory.) When items are ready for shipment, you can convert the sales order into an invoice.

• An invoice represents an actual sale and records the shipment of one or more items to the customer. Dollar amounts on invoices are posted into your accounting system. Item quantities on invoices decrease the number of items on hand.