Sales Orders are created and held until the job is complete, which may be weeks or months. Items on Sales Order does not relieve (reduce) inventory until it is Invoiced, which invoicing could be weeks or months later. Stock Status shows the Quantity on Sales Order and reduces the Available Quantity on that report. Stock Status does not show dollar value. There is no inventory report that shows the value of inventory reduced by the cost of the items on Sales Order.
Maybe there is a good accounting reason why a Sales Order cannot / does not relieve inventory, but that is what I am requesting here. These items are being shipped based on the Sales Order, so they are out of inventory.
An option to allow Sales Order to relieve Inventory would be of great benefit.
by: Lonnie T. | over a year ago | Sales & Distribution
Comments
Does invoicing occur at time of shipping? If invoicing is also considered the actual Sale of goods, then inventory shouldn't be reduced on $$$ until time sold (shipped). Inventory physical is reduced so that the items are reserved for that Sales Order with expectation of being sold in the near future. Just my thought from an accounting perspective.
As stated in my original post, invoicing may not occur until days, weeks, or months later. And yes the product has been shipped. The Sales Order initiates that process. That is the exact problem. I looked into the Shipping module and it does not seem to reduce inventory either, which to me doesn't make sense...can't SHIP something unless you take it from inventory.
This is in the Oilfield industry. In some instances oil companies do not pay until product received has been used. But it would seem to me there are plenty of other business types that use a Sales Order to get the shipping process going and possibly don't bill right away...create a Sales Order...ship the product...inventory should be reduced...who cares when you invoice it. This should be an option in the system 'Reduce Inventory on Sales Order'.