What is a Sales Order?

The Difference Between a Sales Order and Sales Invoice

A sales order is different from a sales invoice or seller's invoice. While both documents are related, they serve different purposes:

A sales order is created to process a customer's purchase request. It includes details like:

Customer name and contact information

Shipping address

Order reference number and date

Product details including name, SKU, quantity

Pricing and payment terms

A sales order is mainly used internally to fulfill the customer's order. It is not used for accounting purposes.

What is a Sales Invoice?

A sales invoice or seller's invoice is issued when the order is fulfilled and shipped. It contains:

Customer name and billing address

Invoice number and date

Products shipped, quantities, pricing

Tax amounts

Total amount due

The seller's invoice serves as an official bill for the customer. It is also used to record the transaction in the seller's accounting system.

Key Components of a Sales Order Form

A complete sales order form includes:

Customer contact information

Separate shipping address if applicable

Order number and date

SKUs and product descriptions

Quantity ordered per SKU

Pricing and payment details like deposits

Terms and conditions

Authorizing signatures

Using a sales order template can help streamline the order creation process. Customize the template to capture all needed customer and product data.

The Importance of Sales Orders for Business Operations

Sales orders facilitate organized order processing and fulfillment. By clearly documenting customer orders, sellers can:

Accurately capture order details

Smoothly manage fulfillment and shipping

Prevent errors and delays

Improve customer satisfaction

Well-designed sales orders set up both seller and buyer for success. They are an essential business process for efficient order management and post-sales customer service.

Frequently Asked Questions

What is the main difference between a sales order and invoice?

A sales order processes the customer's purchase request while an invoice bills the customer after the order ships.

What details go on a sales order?

Details on a sales order include customer contact info, shipping address, order details, products ordered, pricing, quantities, and payment terms.

What details are included on a sales invoice?

A sales invoice contains the customer's name and billing address, invoice number, products shipped, quantities, pricing, tax, and total amount due.

What are some key components of a sales order form?

Key components include customer info, shipping address, order number, product SKUs/descriptions, quantities, pricing, payment terms, T&Cs, and authorizing signatures.