CHAPTER 5: REVENUE CYCLE

At the end of this chapter, students will be able to:

1. Understand the Revenue cycle and its marketing documents in SBO.
2. Create and handle Sales and banking documents used in day-to-day transactions.

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’ accounts 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 be 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 been already entered in SAP Business One. To correct these, use the clearing
document, the returns.
Leads and Customers

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:

Vendor : 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. Add

5. Click the Last Data Record button on the Tool bar . Take note of the document number.
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. From the Sales Order previously created, click ‘Copy to’ on the lower right portion of the 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 listed in the ‘Remarks’ field.
5. Click ‘Add’ button. Click ‘Yes’ when prompted that you can no longer change the document once added.
6. Click Last Data Record.
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 can occur in inventory management because the delivery quantity is posted
twice in the system.

How to Create an A/R Invoice

1. On the Delivery document, click ‘Copy to’ on the lower right portion of the window.
2. Choose A/R Invoice.
3. Contents of the Delivery document will 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. Add
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. On the ‘Selected column’, check the invoice to be paid.

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.