Sales Order Vs. Sales Invoice

Sales Order Vs. Sales Invoice

Sales order and invoice are the two important documents commonly used by various business organization in their day-to-day transactions.

Sales Order Vs. Sales Invoice Usage

Sales Order

Sales Invoice

It essentially indicates the products or services requested by a customer.

It means that the customer is interested in purchasing the company’s products.

Many times, a Sales O rder is created by a customer to communicate his intent of buying.

It indicates that the customer owes money to the company for the requested products. It is usually created after the products have been delivered to the customer’s address.

Sales Order

Content

A Sales order usually contains only the products/services that the customer intends to buy. Since the document is initiated by the customer, it does not contain the pricing of the products.

Sales Invoice On the other hand, a Sales invoice specifically mentions the pricing of each product along with the total that the customer is expected to pay. The invoice may again list the products that the customer has purchased.

Action

Sales Order

Sales Invoice

After a company receives a sales order, it checks whether the products are available and decides if it is possible to complete the order. If yes, it takes all the necessary steps to process the order.

An invoice requires the customer to pay monetary compensation to the company. So after receiving an invoice, the customer takes all the necessary steps to make payments. He may choose to pay the money by cash, company check or through other electronic means.

Purpose

Sales Order

Sales Invoice

Sales order is never recorded in an accounting system such as QuickBooks since it does not indicate completion of sale. As a result, a sales order will never appear in a financial report of any company.

The primary purpose of creating an invoice is to confirm a sale and show that a financial transaction has taken place. No wonder, it is often referred to as a financial document that signifies the sale is complete. Moreover, it will be visible in accounting system.

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