SAP B1 on Cloud Accounting Information System

CHAPTER 5: REVENUE CYCLE

Overview

The sales process in SAP Business One begins with Sales Order. The sales order affects the amount of
stock committed to a customer and, therefore, the available stock quantity.

The delivery reduces the stock committed and the in-stock quantities. The delivery affects the general
ledger, if SAP Business One manages the perpetual inventory. In this case, the delivery will reduce
stock valuation and post a cost of sale.

The A/R invoice is created. It is the only mandatory document in the sales process. It is possible to
create an invoice without first creating a delivery, a sales order, or a sales quotation. If the A/R invoice
is created without reference to the delivery, it will also reduce the quantity in stock.

It records the revenue and tax, and updates the customers ccounts with a new outstanding balance.

Incoming payments are the last step in the basic sales process even though they are a function
in Banking. Posting an incoming payment receives the payment from the customer.

Additionally, it is possible to credit a customer for damaged goods. The returns document is used to
credit the customer if the goods were delivered but no A/R invoice was issued. Use the A/R credit
memo to credit a customer after an A/R invoice was already issued. For legal reasons, you cannot
change or delete deliveries and A/R invoices that have already been entered in SAP Business One. To
correct these, use the returns document to clear the A/R.

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Leads and Customers

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Sales Documents

Sales Order
The sales order is a commitment from a customer or lead to buy a product or service. The
document serves as a foundation for planning production or purchase orders. Creating sales orders does
not post value-related changes in the accounting system. However, if the sales order is created for
items, the ordered quantities are listed in Inventory Management as reserved for the customer. You can
view the ordered quantities in various reports, such as the Inventory Status report, as well as other
windows in SAP Business One.

This information is important for optimizing ordering transactions and stockholding and
ensuring that customer requirements are dealt with quickly and satisfactorily.

How to Create a Sales Order

1. Go to Modules Menu > Sales A/R > Sales Order. Sales Order window will open.
2. Input the following information on the Sales Order header:
Customer: C20000 (Norm Thompson)
Delivery Date: <date today>
3. Input the following information on the Contents tab:
Item/Service Type: Item
Item No: A00001
Quantity: 3
4. Click Add.
5. Click the Last Data Record button on the Tool bar . Take note of the document number.

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Delivery
The Delivery is a legally binding document indicating that the shipment of goods or the delivery
of services has occurred. Without this document, goods can be delivered only if an invoice has already
been created.

When you create a delivery, the corresponding goods issue is also posted. The goods leave the
warehouse, and the relevant stock changes are posted. When the stock is changed, the values in the
accounting system change as well (only when you use perpetual inventory).

How to Create a Delivery document

1.
window.
2. Choose Delivery.
3. The Delivery document will pop up. Input the quantity delivered if there is partial delivery.
4. Note that the base document reference is list
5.
added.
6. Click Last Data Record.

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A/R Invoice
The invoice is a legally binding document. When an invoice is received, the posting is made to
the related customer accounts in the accounting system. If a delivery did not precede the invoice and
you sell the warehouse items, stock quantities are also updated accordingly when you issue the invoice.

If you create an invoice without reference to the delivery, the system automatically posts
changes to the stock. In other words, if a delivery already exists for the transaction and you
create an invoice without reference to this delivery, errors may occur in inventory management
because the delivery quantity is posted twice in the system.

How to Create an A/R Invoice

1.
2. Choose A/R Invoice.
3. Contents of the Delivery document will be copied to the A/R Invoice. Click Accounting tab on the
A/R Invoice window.
4. You can see here the Payment Means and Payment Method to see how payment will be
processed.
5. Click Add.

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Incoming Payments
Incoming payments are the last step in the sales process, even though they are a function in banking.

How to Create Incoming Payments

1. Go to Modules Menu > Banking > Incoming Payments > Incoming Payments.
2. Choose Customer in the code field. In this case, C20000 (Norm Thompson).
3.
4. Click Payment Means on the tool bar.
5. Select the Payment Means (there are 4 options Check, Bank Transfer, Credit Card, Cash), in
this case, choose cash.
6. On the Total field, right click, select Copy Balance Due.
7. Click OK.
8. Click Add and click Yes when prompted with the system message.

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