Difference between a sales order and a purchase order

For some reason, there seems to be a lot of confusion on the difference between a sales order and a purchase order.  Let's see if I can help out.

Both of these types of documents represent an agreement between your company an a third party.  In the case of a purchase order, this agreement is for your company to acquire some services or goods from a vendor.  In the case of a sales order, this agreement is for your company to provide some services or goods to a customer.

As far as AX is concerned, the processes to update these documents and the inventory are pretty similar.  The product receipt, in the case of a purchase order, indicates that the material is physical available. The corollary for the sales order is the packing slip. Similarly, for financial update, the purchase order has a vendor invoice and the sales order has a customer invoice.

These documents are very similar, but their intended parties represent different sides of the supply chain.

Anyone else care to join in?   People coming into the industry might need some help.

  • One thing that confuses people is that a customer will give you their PO number, which you turn into a sales order. So, when you are dealing with a customer, you have to refer to it as their purchase order vs. internally within your own company where you would call it a sales order. This is just the process of business though. Sales orders and purchase orders in AX are in different modules. I think what confuses people is the language that is used with customers and then changing it to discuss internally within their company.
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