Solution

Unit: Sales – A/RTopic: Sales Order to Cash

At the conclusion of this exercise, you will be able to:

Perform the steps of the sales process

Discuss sales documents’ effects on inventory andaccounting

Run the open items list

In this exercise, you create a sales order for a customer. Thenyou change the sales order to accommodate customer requests.You deliver the items to the customer then create an A/Rinvoice for the delivery. When the customer pays yourcompany, you create the incoming payment document.Later, you perform each step of the sales process again whileviewing the effects of each document on inventory andaccounting.

2-1 Follow the steps of the sales process.

2-1-1 Create a sales order for your customer C23900.

Parameter Technology has just called to place an order for amotherboard and five network cards.

Choose Sales A/R Sales Order.

Field Name or Data Type Values

Customer C23900

Delivery Date <2 days from today>

Item No. C00001

Quantity 1

Item No. C00006

Quantity 5

Sales order number: ___________________________

Save the sales order. Choose Add to save the sales order.

2-2 Change a sales order.

2-2-1 The customer calls you to make some changes to the sales order that youjust entered.Choose Sales – A/R Sales Order

Open the sales order you just created.

Either choose the Last Data Record icon or use Find mode to search for thedocument by number or customer name.

Increase the first quantity to 10.The customer tells you that he had been promised a 1% discount on thewhole sales order. Enter a 1% discount for the order total.

Field Name or Data Type Values

Discount 1

Choose Update to save your changes.Choose OK.

2-3 Create a delivery for your sales order.

2-3-1 Open the sales order you just created to create a delivery with the Copy tofunction.Choose Sales – A/R Sales Order.Choose the Last Data Record icon.

2-3-2 Copy all the items from the sales order to a delivery.Choose the button Copy to.

Choose Delivery.Delivery number: ___________________________

Choose Add to save the delivery.Confirm the system message by choosing Yes.

2-4 Create an A/R invoice for your delivery.

2-4-1 From the delivery, you will copy the items to an A/R invoice.

If you have closed the delivery, re-open the delivery. ChooseSales – A/R Delivery. Choose the Last Data Record icon.

In the delivery document, choose Copy to.

Choose A/R invoice.Choose Add to save the invoice.

A/R invoice number: ___________________________Confirm the system message by choosing Yes.

2-5 The customer sent a payment for the delivery using a bank transfer. Create anincoming payment for the A/R invoice.

2-5-1 Open the incoming payments window.

Choose Banking Incoming Payments Incoming Payments.

Field Name or Data Type Values

Code C23900

Select the A/R invoice. Mark the selection box in the Selected column.

Choose the Payment Means icon.Choose the tab Bank Transfer.

Enter the following information.

Field Name or Data Type Values

G/L Account number < Use 161022 for theUK, if using anotherlocalization then theinstructor will provide>

Transfer Date < today’s date>

Reference 79773528

Total Press CTRL + B to copythe total

Choose OK.

Choose Add to save the document.Choose Add.

2-6 Track the effect of each step in the sales process beginning with the sales order.

2-6-1 Create a sales order for a customer and view the effect on inventory.

Choose Sales A/R Sales Order.

Field Name or Data Type Values

Customer C40000

Delivery Date < today>

Item No. A00002

Quantity 10

Choose Add to save the order.

Sales order number: ___________________________

2-6-2 Open the sales order you just created.Choose Last Data Record.

View the details for the row. Double-click on Row 1.Which warehouse is assigned to the first row?

_______________________________________________________Close the window to return to the sales order.

Open the item master record. Choose the link arrow to next to the ItemNo. field.

Choose the Inventory Data tab.How many printers are in stock? ____________________How many printers are committed? ______________________Choose Cancel to return to the sales order._________________

2-7 View the open items list.

2-7-1 Choose Sales A/R Sales Reports Open Items List.Choose Sales Orders in the dropdown list for open documents.

Look for your sales order and item.Choose OK to close the Open Items list.

2-8 Create a delivery and view the effect of the delivery.

2-8-1 Open the sales order you just created.Choose Last Data Record.

Choose Copy to.Choose Add to save the delivery.

Delivery number: ___________________________

Confirm that you want to save the delivery by choosing Yes.

2-8-2 Retrieve the delivery you just created to view the effect of the delivery oninventory.

Choose Last Data Record.Open the item master record by choosing the link arrow next to the ItemNo. field.Choose the Inventory Data tab.

How many printers are in stock? ____________________How many printers are committed? ______________________

Choose Cancel to return to the delivery.2-8-3 View the effect of the delivery on accounting.

Choose the Accounting tab.Open the journal entry. Choose the link arrow next to the JournalRemarks field.What are the two postings made by the delivery document?

______________________________________________________________________________________________

Choose Cancel to return to the delivery.2-9 Create the A/R invoice and view the accounting effects.

2-9-1 From the delivery document, choose Copy to.Choose A/R Invoice.

Choose Add to save the invoice.Confirm the system message to save the invoice.

A/R Invoice number: ___________________________Re-open the invoice you created with the Last Data Record icon.

Choose the Accounting tab.Open the journal entry. Choose the link arrow next to the JournalRemark field.What type of postings is made to indicate the customer owes us money:debit or credit?________________________________________________________A debit posting is made to the customer account.What type of posting is made to record sales revenues: debit or credit?A credit posting is made for sales revenue._________________________________________________________

Close all open windows.

2-9-2 As you saw in the journal entry, no changes to inventory were recordedwhen you created the A/R invoice. When would an A/R invoice recordchanges to inventory?________________________________________________________

________________________________________________________If there is no preceding delivery document, the A/R invoice records thechanges to inventory quantity. Additionally, if you are running perpetualinventory, the A/R invoice records the changes to inventory value in theresulting journal entry.