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Buying and selling

What is a sales order? Meaning, format and example

Definition

Sales order: A sales order is the seller's record of a confirmed customer order, listing what will be delivered, at what price and when, before the invoice is made.

Also called: SO, Customer order, Sales order meaning, Order confirmation

What a sales order is

A sales order is made when a customer confirms what they want. It is the seller's record of the deal: items, quantities, prices, discounts, delivery address, delivery date and payment terms. It is not a tax invoice; GST is charged on the invoice, not on the order.

The usual chain is quotation, sales order, delivery with a delivery challan, tax invoice and payment. The sales order is what the godown packs from and what the accounts team invoices from, so everyone works from the same numbers.

What a sales order should show

Whether it is typed, printed or kept in software, a sales order should carry:

  • Order number and date, and the customer's own reference or PO number.
  • The customer's billing and shipping addresses, and GSTIN.
  • Items, quantities, rates, discounts and GST rates.
  • The location goods will leave from and the promised delivery date.
  • Payment terms, and any advance already received.

Sales order, quotation, challan and invoice: the difference

Each document has its own job in one sale:

  • Quotation: your offer, which the customer can still change or turn down.
  • Sales order: the agreed order, before anything is delivered.
  • Delivery challan: what has physically left your godown, and what is still pending.
  • Tax invoice: the bill with GST, which the customer pays and claims credit on.

Why sales orders help, and common mistakes

Open sales orders show what has been promised but not yet delivered. That tells you what to pack today, what to make or buy, and which customers are waiting. Common mistakes are taking orders on WhatsApp and losing track of what is pending, confirming an order without checking stock, and changing prices on the invoice that the customer never agreed on the order.

Worked example

A distributor's part delivery

A Kolkata distributor gets an order from a supermarket for 200 cartons of tea at ₹2,250 a carton, ₹4,50,000 before GST, on 15-day terms. Only 120 cartons are in the godown. It confirms sales order SO-00418, sends the 120 cartons today with a delivery challan, and the order shows 80 cartons pending until the next stock arrives.

In managemate

In managemate, a sales order starts as a draft, which prints as a quotation, and becomes a sales order (SO-00001 by default) when you confirm it. Choose the customer, their billing and shipping addresses and the location goods leave from; lines fill in with the selling price and GST rate, take a percentage discount and can be added by scanning. Confirming does not move stock: stock leaves the location when you record each delivery. The order shows one step at a time, Prepare, Deliver, Invoice and Get paid, and the list has Drafts, To deliver and Completed views. You can record an advance on a confirmed order, and people allowed to see costs see each order's margin.

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