Sales Flow
Complete end-to-end documentation of sales transactions in NetSuite - with or without Sales Orders - covering all variations from order entry to cash collection.
In This Section
| Page | Description |
|---|---|
| Standard Path | SO → Fulfillment → Invoice → Payment |
| Direct Paths | Invoice Direct, Cash Sale, Standalone transactions |
| Returns & Credits | RMA, Credit Memo, Customer Refund |
Master Flow Diagram
COMPLETE SALES FLOW (ALL PATHS)
─────────────────────────────────────────────────────────────────
┌─────────────────────────────────────────────────────────────────┐
│ WITH SALES ORDER │
├─────────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────────┐ │
│ │ SALES ORDER │ │
│ │ GL: None │ │
│ │ Inv: Commits │ │
│ └────────┬────────┘ │
│ │ │
│ ┌──────────────────┼──────────────────┐ │
│ │ │ │ │
│ ▼ ▼ ▼ │
│ ┌────────────────┐ ┌──────────────┐ ┌──────────────────┐ │
│ │ STANDARD PATH │ │ INVOICE ONLY │ │ CASH SALE │ │
│ │ (Ship & Bill) │ │ (No Ship) │ │ CONVERSION │ │
│ └───────┬────────┘ └──────┬───────┘ └────────┬─────────┘ │
│ │ │ │ │
│ ▼ │ ▼ │
│ ┌────────────────┐ │ ┌──────────────────┐ │
│ │ITEM FULFILLMENT│ │ │ CASH SALE │ │
│ │ GL: None* │ │ │ GL: Yes │ │
│ │ Inv: Reduces │ │ │ Inv: Reduces │ │
│ └───────┬────────┘ │ └────────┬─────────┘ │
│ │ │ │ │
│ ▼ ▼ │ │
│ ┌────────────────┐ ┌──────────────┐ │ │
│ │ INVOICE │ │ INVOICE │ │ │
│ │ GL: Yes │ │ (Direct) │ │ │
│ │ Inv: None │ │ GL: Yes │ │ │
│ └───────┬────────┘ │ Inv: Reduces │ │ │
│ │ └──────┬───────┘ │ │
│ │ │ │ │
└─────────────┼──────────────────┼──────────────────┼────────────┘
│ │ │
│ │ │
┌─────────────┼──────────────────┼──────────────────┼────────────┐
│ │ WITHOUT SALES ORDER │ │
├─────────────┼──────────────────┼──────────────────┼────────────┤
│ │ │ │ │
│ │ ┌──────────────────┐ │ │
│ │ │ STANDALONE │ │ │
│ │ │ INVOICE/CASH SALE│ │ │
│ │ │ GL: Yes │ │ │
│ │ │ Inv: Reduces* │ │ │
│ │ └────────┬─────────┘ │ │
│ │ │ │ │
└─────────────┼─────────────┼───────────────────────┼────────────┘
│ │ │
└─────────────┼───────────────────────┘
│
▼
┌────────────────────────────────────┐
│ CUSTOMER PAYMENT │
│ GL: Yes (A/R → Cash) │
└────────────────────────────────────┘
* GL at Fulfillment only if "Post COGS at Fulfillment" enabled
* Standalone transactions reduce inventory only for inventory items
Accounting Basics (For Non-Accountants)
Before diving into GL entries, here's a simple explanation of debits and credits.
The Golden Rule
DEBIT AND CREDIT SIMPLIFIED
─────────────────────────────────────────────────────────────────
Think of it like a balance scale:
DEBIT (Left) CREDIT (Right)
▼ ▼
┌─────────┐ ┌─────────┐
│ │ │ │
│ $100 │ ═══ │ $100 │
│ │ │ │
└─────────┘ └─────────┘
Every transaction must balance: Total Debits = Total Credits
Account Types and Their Normal Behavior
| Account Type | Increases With | Decreases With | Examples |
|---|---|---|---|
| Assets (what you own) | Debit | Credit | Cash, Inventory, A/R |
| Liabilities (what you owe) | Credit | Debit | A/P, Loans, Tax Payable |
| Equity (owner's stake) | Credit | Debit | Retained Earnings |
| Revenue (money earned) | Credit | Debit | Sales, Service Income |
| Expenses (money spent) | Debit | Credit | COGS, Rent, Salaries |
Simple Memory Trick
ASSETS, EXPENSES (AE) = Debit to increase
LIABILITIES, EQUITY, = Credit to increase
REVENUE (LER)
Real Example: Selling a Widget
INVOICE GL ENTRY EXPLAINED
─────────────────────────────────────────────────────────────────
You sell a widget for $100 (cost was $60)
Step 1: Record the SALE
┌─────────────────────────────────────────────────────────────────┐
│ Accounts Receivable (Asset) $100 DEBIT │
│ └── WHY? Customer owes you money = you have MORE of an asset │
│ │
│ Sales Revenue $100 CREDIT │
│ └── WHY? You earned money = revenue INCREASES with credit │
└─────────────────────────────────────────────────────────────────┘
Step 2: Record the COST
┌─────────────────────────────────────────────────────────────────┐
│ Cost of Goods Sold (Expense) $60 DEBIT │
│ └── WHY? It cost you $60 = expense INCREASES with debit │
│ │
│ Inventory (Asset) $60 CREDIT │
│ └── WHY? Widget left your shelf = you have LESS inventory │
└─────────────────────────────────────────────────────────────────┘
Result: $100 sale - $60 cost = $40 profit
Why It Matters
| When You See... | It Means... |
|---|---|
| Debit A/R | Customer owes you more |
| Credit A/R | Customer paid you |
| Debit Cash | You received money |
| Credit Cash | You paid money out |
| Debit COGS | Cost recognized (expense increases) |
| Credit Inventory | Stock left your warehouse |
| Credit Revenue | You made a sale |
Quick Reference
GL vs Inventory Summary
| Transaction | GL Posts? | Inventory Impact |
|---|---|---|
| Sales Order | No | Commits qty |
| Item Fulfillment | No* | Reduces On Hand |
| Invoice | Yes | No change |
| Invoice Direct | Yes | Reduces On Hand |
| Cash Sale | Yes | Reduces On Hand |
| Customer Payment | Yes | No change |
| Credit Memo | Yes | Increases* |
| Customer Refund | Yes | No change |
*Exceptions apply - see detailed pages
Next Steps
- Standard Path - Learn the most common flow: SO → IF → Invoice → Payment
- Direct Paths - Skip fulfillment or Sales Order entirely
- Returns & Credits - Handle customer returns and credits