Understanding Sales Orders

This document provides an overview of how sales orders work in Zoho ERP. It explains the purpose of sales orders, their benefits, and how they fit into the sales, fulfillment, and billing processes.

What is a sales order?

A sales order is an official document issued by a business to a customer that confirms the sale of items or services, along with their quantities, prices, and delivery details.

Sales orders act as a formal confirmation of a sale and help organizations track commitments made to customers before invoicing or fulfillment.

In the Sales Orders module, you can:

Create and send sales orders to customers to confirm purchases.
Track pending, partially fulfilled, or completed orders.
Convert sales orders into shipments and invoices.
Monitor fulfillment and billing status for each order.

Key Benefits of Using Sales Orders

Provides clear confirmation of customer orders
Helps track items pending shipment or delivery
Enables accurate inventory reservation and planning
Supports partial shipments and invoicing
Maintains a clear audit trail from order to payment
Improves coordination between sales, inventory, and finance teams

Lifecycle of a Sales Order

The lifecycle of a sales order represents the stages it goes through from creation to completion. A sales order is typically created as a draft, confirmed, and then partially or fully fulfilled and invoiced.

Depending on your business workflow, a sales order can move through the following stages:

Draft – The sales order is created but not yet confirmed.
Confirmed / Open – The sales order is approved and ready for fulfillment.
Partially Shipped – Some items in the sales order have been shipped.
Fully Shipped – All items in the sales order have been shipped.
Partially Invoiced – An invoice has been created for part of the order.
Fully Invoiced – All items in the sales order have been invoiced.
Closed – The sales order is completed and no further actions are required.

How Sales Orders Work with Inventory and Invoicing

Sales orders act as a central link between sales, inventory, and accounting in Zoho ERP.

When you create a sales order:

Inventory is not immediately reduced, but item availability is tracked.
You can create one or more shipments to fulfill the order.
Inventory is reduced when shipments are created.
You can generate one or more invoices based on shipped or confirmed quantities.
Payments recorded against invoices help complete the sales cycle.

This flexibility allows businesses to handle partial deliveries, backorders, and staged billing efficiently.

Configure Preferences

You can configure the Sales Orders module based on your business requirements, such as enabling approvals, shipment creation, or invoice linkage.