Backorders

A backorder is created when you commit to fulfilling a customer’s sales order but do not have sufficient stock available at the time of order confirmation. In such cases, you can create a purchase order directly from the sales order to procure the missing quantity from your vendor. Once the items are received, you can deliver the remaining items to your customer.

When can you create backorders?

You can create backorders in the following cases:

If only a portion of the ordered quantity is available, you can ship the available items first and backorder the remaining quantity.

Scenario: Patricia Boyle receives a sales order for 100 cricket bats from her customer. She currently has 70 bats in stock. Patricia ships the available 70 bats and creates a back ordered purchase order to her vendor, for the remaining 30 bats. Once the 30 bats are received she delivers the remaining to her customer and fulfils the entire sales order.

If you prefer to deliver all items together, you can place the sales order on hold and create a backorder for the remaining items.

Scenario: Patricia Boyle receives a sales order for 50 watches from her customer. She currently has 30 watches in stock. Patricia places the sales order on hold. She creates a back ordered purchase order to her vendor for the remaining 20 watches. After receiving the watches, she ships all 50 watches to her customer and fulfils the sales order.

You can create a backorder even if you have no stock for the ordered item.

Scenario: Patricia Boyle receives a sales order for 30 acoustic guitars from her customer. Currently, she has no stock. Instead of losing sales Patricia puts her customer’s sales order on hold and creates a back ordered purchase order to her vendor, Brandon Tyler for the 30 guitars. Once she receives that 30 acoustic guitars from her vendor, she delivers the 30 acoustic guitar to her customer and fulfils the sales order.

Workflow

This is how back orders work in Zoho ERP:

Create a sales order from Sales module for your customer.
You will receive an alert in the sales order’s details page if you’re running out of stock to fulfil the order.
Click Backorder Now or select Backorder from the More icon.
The sales order will be put on hold.
A back ordered purchase order is automatically created with pre-filled details. You can review and add the other required details.
Click Convert to Bill to close the purchase order.
Once the items are receives, the sales order will be confirmed , allowing you to pack and ship the items to your customer.

Create Backorders

Note: Backorders can be created only for items that are out of stock or have insufficient stock to fulfill the sales order.

Here’s how you can create a backorder:

Go to Sales in the left side bar and click Sales Orders in the top module bar.
Click + New on the top right corner of the page or the + icon next to Sales Orders.
Create a sales order and save and send it to your customer.

If any items require back ordering, an alert message appears on the sales order details page.

Click Backorder now in the alert. Alternatively, click the More icon and select Backorder.
Select the items you want to backorder in the pop-up.

Pro tip: Check the box near ITEM DETAILS to select items in bulk.

Note: If you have added specific description to your items in the sales order, you can easily transfer it to your vendor’s purchase order by checking the Copy the sales order’s item descriptions to the new purchase order box.

Click Backorder.
Review and fill the required details in the New Purchase Order page. The item details will be auto-populated.
Click Save. The back ordered purchase order will now be in open status.
Click Convert to Bill from the purchase order’s details page to close the back ordered purchase order.

Note: The associated sales order’s status updates to On Hold.
When a sales orders is on hold, you cannot create packages or invoices from it.

You can create invoices or packages either before creating a backorder, or when the backorder process is completed.

Fill in the required details in the New Bill page and save it.
The back ordered purchase order will be closed and the associated sales order will be confirmed.

Create a Backorder for Multiple Sales Orders

You can also create a single back order for multiple sales orders at once. Here’s how:

Select the sales orders that require backordering.
Click Backorder.
In the Choose the items to be back ordered dialog box, select the list of items you wish to backorder for all the selected sales orders, and then click Backorder.

Filters - Backorders

You can filter sales orders that are either back-ordered or on hold. To do this:

Go to Sales in the left side bar and click Sales Orders in the top module bar.
Click the All Sales Orders dropdown.
Select Backorder to view sales orders with back ordered items.
Select On Hold to view sales orders placed on hold due to backorders.

You can filter purchase orders that are either back-ordered or back-ordered and unbilled. To do this: