Understanding Sales Orders and Invoices in Stride

Welcome to our quick guide on two key components of your business management system: sales orders and invoices. This guide aims to clarify the differences between these two elements and how they function within our system. Whether you're new to the platform or need a refresher, this guide is for you.

What is a Sales Order?

Definition: A sales order is a document generated after a customer places an order for goods or services. It's essentially a contract between your business and the customer, outlining the details of what has been ordered.

Key Features:

-Details of the Order: It includes specifics such as the type and quantity of products or services, pricing, and delivery details.

-Order Confirmation: The sales order signifies that you have acknowledged the customer's order and intend to fulfill it.

-Inventory Management: Sales orders are crucial for managing inventory levels, as they trigger the process of reserving stock or scheduling services.  If the customer purchases an item that is shippable (ie consumable or storable item) it will also trigger a delivery order in the system.

What is an Invoice?

Definition: An invoice is a billing document sent to customers after delivering the goods or services. It's a request for payment, indicating that the order has been fulfilled.  In Stride, invoices that are for refunds are called "Credit Notes" and are prefixed with an "RINV" meaning return/refund invoice.  Please note that a credit note will not show a negative number.  It will show as a positive number that you owe the customer.

Key Features:

-Billing Information: The invoice includes the total amount due, payment terms, and methods.

Record of Transaction: It serves as an official record of the sale for both accounting and tax purposes.

-Payment Tracking: Invoices are essential for tracking payments and managing accounts receivable.  Payment transactions are tied to the invoice.

Differences and Functions

While both sales orders and invoices are integral to the sales process, they serve different functions.

-Timing: Sales orders are created when a customer places an order, while invoices are typically generated post-delivery of goods or services.  Please note, that for eCommerce orders (and others) you can set the invoice to be automatically created at time of purchase.  Changes to the order during fulfillment will require subsequent changes to be recorded as an additional invoice and/or credit note.

-Purpose: Sales orders confirm and detail the order, whereas invoices request and track payments.  In Stride, payment can be taken against a Sales Order, but the payment will ultimately need to be recorded on the invoice level.

-Inventory Impact: Sales orders affect inventory by reserving items, but invoices do not directly impact inventory levels.

How They Work Together in Our System

In our system, the sales order and invoice processes are seamlessly integrated to ensure efficient order management and billing. Here's how they typically flow:

Sales Order Creation: Once a customer order is received, a sales order is created to confirm and record the order details.  (Before a sales order is confirmed it is called a “Quote”.  A quote won’t reserve inventory or create a delivery order.  That happens once the sales order is confirmed.)

Order Fulfillment: The system helps manage inventory and resources to fulfill the order.

Invoice Generation: After order fulfillment (or at time of purchase depending on your settings), an invoice is generated and sent to the customer for payment recording.  (For eCommerce invoices can be created at checkout.  Users can also require payment in order to “confirm” a sales order.  If auto-invoice is turned on invoices will be created and marked paid when a sales order is paid for.)

Payment Processing: The system tracks payment status and updates financial records upon receipt of payment.

Conclusion

Understanding the distinction between sales orders and invoices is crucial for efficient business operations. Our system is designed to streamline these processes, ensuring accurate order handling and billing. If you have any questions or need further assistance, our team is always here to help.