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Multiple Order Flows

There are multiple ways to end up at an invoice. They'll have different names in various industries, but you could break them down like this:

  1. Front Counter Sale / Point of Sale (POS) / Instant Invoice
  2. Sales Order / Order to Invoice / Special Order / Order - Shipment - Invoice

Front Counter Sale

This is certainly the most contained operation. A customer walks up to the counter, holding the item. They put in on the counter, your cashier scans it, they pay, then walk out with the item. It happens billions of times a day, this is a standard retail sale. From a business perspective, the critical aspects are:

  • inventory can be adjusted instantly
  • payment can be received directly (or applied to customer's account credit)
  • invoice/receipt generated instantly

The key is that all aspects of the transaction can be determined at a single point in time.

Sales Order

With a Sales Order, there's much more potential complication. Briefly, the flow is:

  • an order is taken
  • the order is fulfilled
  • any additional charges, such as freight, are added
  • the delivered items are converted to an invoice

Each of these steps needs to be handled separately, and likely by several different people. Your sales people aren't driving forklifts, the warehouse team isn't worrying about prices, and the credit department is handling a whole different raft of issues.

Complications matching all the realities of business can pop up. Do you have sufficient inventory to fulfill the order? Maybe only partially? Maybe you ship two orders out together in one box? Are the freight charges even known when the package leaves the dock? If you're combining multiple shipments, how do you handle if they were originally specified to travel via different methods, say, USPS and truck? Is payment required to place the order, or before it leaves the dock?