>ERPNext Standard Sales Cycle

Trading is the act of exchanging goods or services, typically for money.

The diagram below illustrates a standard sales process in ERPNext. The process can be divided into three main phases:

1. Making contact and agreeing on quantity and price
2. Making delivery
3. Making payment

Once the exchange is completed, the sales process is considered finished.

Process Overview#

Pre-sales#

This phase involves creating a quotation and obtaining customer approval in the form of a sales order. It is handled by the sales user.

Create Sales Invoice#

After the sales order is approved, the sales user creates and submits a sales invoice and schedules the delivery note according to the agreed timeline.

Ledger

Account G.	Account	Debit	Credit
Asset	Debtors	10,700
Liability	Sales Tax		700
Income	Sales		10,000

Balance

Account G.	Account	Debit	Credit
Asset	Debtors	10,700
Liability	Sales Tax		700
Income	Sales		10,000
	Totals	10,700	10,700

Make Delivery#

Once the delivery note is created, the stock user is notified and proceeds with the delivery. After the delivery is completed, the delivery note is submitted.

Ledger

Account G.	Account	Debit	Credit
Asset	Stock In Hand		3,000
Expense	Cost of Goods Sold	3,000

Balance

Account G.	Account	Debit	Credit
Asset	Debtors	10,700
Liability	Sales Tax		700
Income	Sales		10,000
Asset	Stock In Hand	-3,000
Expense	Cost of Goods Sold	3,000
	Totals	10,700	10,700

Make Payment#

After the delivery note is submitted, the accounting user is notified that the invoice is ready to be sent to the customer. The accounting team tracks the payment and creates a payment entry once the customer pays. At this point, the sales process is complete.

Ledger

Account G.	Account	Debit	Credit
Asset	Debtors		10,700
Asset	Cash	10,700

Balance

Account G.	Account	Debit	Credit
Asset	Cash	10,700
Liability	Sales Tax		700
Income	Sales		10,000
Asset	Stock In Hand	-3,000
Expense	Cost of Goods Sold	3,000
	Totals	10,700	10,700

Summary#

The above describes the standard ERPNext sales cycle, which many companies can adopt as a starting point.

However, real-world business scenarios are often more complex. Consider cases involving advance deposits, delivery before invoicing, or customer returns due to defective items.

An ERPNext implementer must carefully plan for each variation. Successful ERP implementation lies in managing these details effectively.