The sales cycle in SAP Business One

Money left at the previous station. Now it comes back.

The shape of the cycle mirrors what you have already seen: an order, then fulfilment, then an invoice, then collection. But three ideas in it have no direct counterpart on the purchase side, and all three are what get asked when somebody tests your understanding rather than your memory.

The documents and their effect on the ledgers

Document	What it represents	Produces an entry?	Moves stock?
Quotation	A commitment to the customer, not to the ledgers	No	No
Sales order	An undertaking to deliver, and it reserves the quantity	No	No — it only reserves
Delivery note	The goods actually left	Yes	Yes
Customer invoice	The claim was issued	Yes	No — if a delivery preceded it
Incoming payment	The money arrived	Yes	No

The second row carries the first idea: a reservation is not a stock movement.

A sales order reduces what is available to promise without reducing the physical balance. After an order for a hundred units the warehouse still holds a hundred, and its available-to-promise is zero. Anyone who does not distinguish the two numbers promises a second customer goods already promised to someone else — the single commonest operational error in distribution businesses anywhere.

The second idea: revenue and cost are not necessarily posted together

This is the most important paragraph at this station.

Cost of goods sold is posted when the goods leave — that is, with the delivery note. Revenue is posted with the invoice.

Event	Debit	Credit
Delivery note	Cost of goods sold	Stock
Customer invoice	The customer	Revenue + tax
Collection	The bank	The customer

So if goods are delivered in one month and invoiced in the next, the first month carries cost with no revenue and the second carries revenue with no cost.

That is not a fault in the system; it is a faithful reflection of what actually happened. The remedy is not to edit the entry, but to stop leaving a gap between the two events for no reason — an operational decision rather than a configuration one.

When you hear an accountant call a month’s margin “strange”, start here. The gap between delivery and invoicing explains most cases, and looking for it comes before looking anywhere else.

The third idea: the credit limit stops a document before it is posted

The number written on the partner record at station three does its work here.

The system compares the customer’s outstanding balance against the limit and objects when it is exceeded. The objection is configurable: a warning that an approval overrides, or a block that nothing overrides.

Choosing between them is not a technical setting; it is the company’s policy written into the system. A consultant who sets that field without asking is writing a credit policy on the owner’s behalf.

Read that as a miniature of the consultant’s whole job: the field is technical, the decision behind it is not, and anyone who confuses the two implements what nobody asked for.

Direct invoicing — and when it is legitimate

An invoice with no delivery note is correct in exactly one case: when the sale and the delivery happen at the same moment — a cash sale over the counter, or a service performed and billed.

In that case the invoice carries both effects at once: the goods leave, and cost and revenue are posted together.

In distribution and trade, separation is the norm, because a shipment, a distance and a time sit between them. Anyone invoicing directly in a distribution business buys a day’s convenience at the price of a year’s traceability.

Returns — two documents, not one

Exactly as in purchasing: a sales return reverses the delivery’s effect on stock, and the credit note reverses the invoice’s effect on the account.

The common error is issuing a credit note on its own for goods that physically came back — the customer’s account is corrected and the stock stays short for no reason, until a stock count finds it and it is cleared by an adjustment nobody can explain.

What you actually do at this station

• Run a full sales cycle: quotation, order, delivery, invoice, collection — each document built on its predecessor.
• Open the delivery entry and the invoice entry separately, and write down every account that moved in each. That is the station.
• Deliver in one month and invoice in the next, then read both months’ income statements. You will not forget the lesson afterwards.
• Set a low credit limit and try to exceed it, then switch the behaviour from warning to block and watch the difference.
• Run a complete return with both its documents, and verify its effect on stock and on the customer account together.

The three commonest errors

One: direct invoicing in a distribution business. It saves a step today and destroys the ability to know what actually shipped.

Two: reading the physical balance as available to promise. Explained above, and its price is an angry customer rather than a wrong entry — which is why it never appears in a financial report.

Three: a credit note with no return. It corrects half the picture and leaves the other half to a stock adjustment nobody can account for.

What that does to running a distribution business is set out in the SAP Business One guide, and the general logic of the cycle — from quotation to collection, with no particular system — is in the order-to-cash cycle.

The acceptance test for this station

1. Explain the difference between the physical balance and available-to-promise, and when they diverge.
2. Write from memory the delivery entry and the invoice entry separately.
3. Deliver in one month and invoice in the next, and explain the effect on both months’ income statements.
4. Run a complete five-document cycle and document its entries.
5. Set a credit limit and prove the system objected, then explain why choosing “warning” or “block” is an owner’s decision rather than a consultant’s.

What comes next

You have run both cycles of money. The next station answers the question deferred twice: at what number is stock valued? — inventory and costing, containing the measured difference between three valuation methods on one item, in figures, and the decision taken at station three whose full effect shows up here.