You can usually create either a sales order or sales invoice to record your agreement with a customer to sell certain products on certain delivery and payment terms.
However, you must use a sales order instead of a sales invoice if you:
- Need to ship only part of an order quantity, for example, because the full quantity is not on hand.
- Ship products after you post the corresponding sales invoices.
- Sell items your vendor delivers directly to your customer, known as drop shipment. Learn more at Make Drop Shipments.
In all other situations, sales orders and sales invoices work in the same way. Learn more about how to use sales orders at Sell Products.
You can negotiate with the customer by first creating a sales quote, which you can convert to a sales invoice when you agree on the sale.Learn more at Make Sales Quotes.
Create sales invoices
If the customer decides to buy, you post the sales invoice to create the related quantity and value entries. When you post the sales invoice, you can also email it as a PDF attachment. You can prefill the email body with a summary of the invoice and payment information, such as providing a link to PayPal. Learn more at Send Documents by Email. When the customer then pays the invoice, you can register that payment in different ways, depending on the size and preferred workflows of your organisation. Learn more at Registering Payments section.
Item cards can be of the Inventory, Service, or Non-Inventory type to specify if the item is a physical inventory unit, a labour time unit, or a physical unit not kept on inventory, respectively. Learn more at Register New Items. The sales invoice process is the same for all three item types.
You can fill customer fields on the sales invoice in one of two ways, depending on whether the customer is already registered. See step 2 in the following procedure.
To create a sales invoice
Choose the icon, enter Sales Invoices, then choose the related link.
In the Customer field, enter the name of an existing customer. If, however, the customer is new and therefore not registered, follow these steps to populate standard customer information on the Sales Invoice page:
- In the Customer Name field, enter the name of the new customer.
- In the dialogue box about registering the new customer, choose Yes.
- On the Select a template for a new customer page, choose a template to base the new customer card on, then choose OK.
- A new customer card displays the information on the selected customer template. Fill in the remaining fields. Learn more at Register New Customers.
- When you've completed the customer card, choose Close to return to the Sales Invoice page.
Several fields on the sales invoice are now filled with information that you specified on the new customer card.
Fill in the remaining fields on the Sales Invoice page as necessary. Hover over a field to read a short description.
If you allow the customer to pay immediately, for example, by cash or PayPal, then fill in the Payment Method Code field. The payment is then recorded as soon as you post the sales invoice. If you select Cash, then the payment is recorded in a specified balancing account.
You're now ready to fill in the Lines FastTab with products you are selling to the customer or for any transaction with the customer you want to record in a general ledger (G/L) account.
On the Lines FastTab, in the Type field, select the type of product, charge, or transaction you'll post for the customer on the sales line.
- If you've set up recurring sales lines for the customer, such as a monthly replenishment order, you can reflect that in the order by choosing the Get Recurring Sales Lines action.
In the No. field, select a record to post according to the value in the Type field.
You leave the No. field blank in the following cases:
- If the line is for a comment. Write the comment in the Description field.
- If the line is for a catalogue item. Choose the Select Catalogue Items action. Learn more at Work With Catalogue Items.
In the Quantity field, enter how many units of the product, charge, or transaction the line should record for the customer.
If the item is of the Service type, or the Type field contains Resource, then the quantity is a time unit, such as hours, as indicated in the Unit of Measure Code field on the line. Learn more at Set Up Item Units of Measure
The value in the Line Amount field is calculated as Unit Price × Quantity.
The price and line amounts are with or without sales tax, depending on what you selected in the Prices Including Tax field on the customer card.
If you want to give a discount, enter a percentage in the Line Discount % field. The value in the Line Amount field updates accordingly.
If special item prices are set up on the Sales Prices and Sales Line Discounts FastTab on the customer or item card, the price and amount on the sales line automatically update if the price criteria is met. Learn more at Record Sales Price, Discount, and Payment Agreements.
Repeat steps 4 through 7 for every product or charge that you want to invoice the customer for.
The totals fields under the lines are automatically updated, as you create or modify lines, to display the amounts that will be posted to the ledgers.
In very rare cases, the posted amounts may deviate from what is displayed in the totals fields. This is typically due to rounding calculations in relation to GST or US sales tax.
To check the amounts to actually be posted, you can use the Statistics page, which takes into account the rounding calculations. Also, if you choose the Release action, the totals fields will be updated to include rounding calculations.
In the Inv. Discount Amount Excl. Tax field, enter an amount that should be deducted from the value shown in the Total Incl. Tax field.
If you have set up invoice discounts for the customer, then the specified percentage value is automatically inserted in the Invoice Discount % field if the discount criteria are met, and the related amount is inserted in the Inv. Discount Amount Excl. Tax field. Learn more at Record Sales Price, Discount, and Payment Agreements.
When the sales invoice lines are completed, choose the Post and Send action.
The Post and Send Confirmation dialog box displays the customer's preferred method of receiving documents. You can change the sending method by choosing the lookup button for the Send Document to field. Learn more at Set Up Document Sending Profiles.
The related item and customer ledger entries are now created in your system, and the sales invoice is output as a PDF document. The sales invoice is removed from the list of sales invoices and replaced with a new document in the list of posted sales invoices.
Calculating invoice discounts on sales
After you've added all the items on lines you can calculate the invoice discount for the entire sales document by choosing the Calculate Invoice Discount action.
The discount is calculated based on all lines on the sales document where the Allow Invoice Disc. checkbox is chosen. By default, invoice discounts are allowed. However, lines with item charges, for example, are not included in the calculation of the invoice discount. To apply a discount to such lines, enter a value in the Line Discount Amount field on the lines.
By default, the Allow Invoice Disc. and Line Discount Amount fields are hidden on lines. If the fields aren't available, you can add them by personalising the page. For more information, see Personalise Your Workspace.
If the Calc. Inv. Discount field is selected in the Sales and Receivables Setup page, the invoice discount is calculated automatically. When the calculation happens differs, depending on the type of sales document you're using.
If you're using a sales order, the discount is calculated when you add a line. For all other sales documents, such as sales invoices, the discount is calculated when you do any of the following actions:
- View statistics
- View a test report
You define invoice discount terms for a customer on the Cust. Invoice Discounts page. The currency code on the sales document is used to find the invoice discount terms in the corresponding currency.
If you haven't defined invoice discounts for foreign currencies, the discount terms on the Cust. Invoice Discounts page are used to calculate the discount. The calculation uses your local currency and the exchange rate that was valid on the document's posting date.
Once the invoice has been posted, you can find it in the list of posted invoices. Both the Posted Sales Invoices list and the Posted Purchase Invoices list show the posted invoices with the final invoice numbers. From the list, you can look up each posted invoice, and you can correct or cancel a posted invoice.
For each posted invoice, you can look up statistics, dimensions, and the ledger entries that are the result of the posted invoice. You can also print or send the posted invoice.
You can easily correct or cancel a posted sales invoice before it is paid. This is useful if you want to correct a typing mistake or if the customer requests a change early in the order process. Learn more at Correct or Cancel Unpaid Sales Invoices. If the posted sales invoice is paid, then you must create a sales CR/Adj note to reverse the sale. Learn more at Process Sales Returns or Cancellations.
Open the Posted Sales Invoices list in Business Central.
Depending on your business needs, you can get paid and register a payment in different ways: manually, automatically, and through payment services.
You can process the payments straight from the customer card. Use the Register Customer Payments action to get an overview of unpaid invoices for that customer. Then, mark the invoice as paid partially or in full. This payment reconciliation processes your customer payments by matching amounts received in your bank account with the related unpaid sales invoices, and then posts the payments. Learn more in the To reconcile payments individually section.
In business environments where the customer pays some time after delivery, according to the payment terms, a posted sales invoice remains open (unpaid) until the Accounts Receivable department verifies that payment is received and applies it to the posted sales invoice. This can be done manually or automatically. Learn more at Reconcile Customer Payments with the Cash Receipt Journal or from Customer Ledger Entries and Reconcile Payments Using Automatic Application.
In business environments where the customer pays immediately, for example by PayPal or cash, payment is recorded immediately when you post the sales invoice, that is, the posted sales invoice is closed as fully applied. You select the relevant method in the Payment Method Code field on the sales order. For electronic payments, such as PayPal, you must also fill in the Payment Service field. Learn more at Enable Customer Payments Through Payment Services.
You can even create directly paid invoices for non-registered customers by setting up a "cash customer" card for them, which you point to on the sales invoice. Learn more at Set Up Cash Customers.
If you want to send your customers reminders of overdue payments, you need to set up reminder levels and terms first. Learn more at Set Up Reminder Terms and Levels.
External document numbers
On sales documents and journals, you can specify a document number that refers to the customer's numbering system. Use this field to record the number that the customer assigned to the order, invoice, or CR/Adj note. You can then use the number later if, for some reason, you need to search for the posted entry using this number.
The Ext. Doc. No. Mandatory field on the Sales & Receivables Setup page specifies whether it is mandatory to enter an external document number in the External Document No. field on a sales header and the External Document No. field on a general journal line.
If you select this field, it will not be possible to post an invoice or a general journal line without an external document number.
The external document number is included in posted documents where you can search by the relevant number. You can also search using the external document number when navigating on customer ledger entries.
A different way to handle external document numbers is to use the Your Reference field. If you use the Your Reference field, the number will be included in posted documents, and you can search by it in the same way as for values from External Document No. fields. But the field is not available on journal lines.
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