Inventory & Purchase Orders / Sales Orders

This post is mostly in reference to what I read here and I’m hoping someone has a suggestion for a workaround, or perhaps since 17.6.10 there has been an update that allows a different setting for this.

First a quick introduction to the problem I’m encountering while testing Manager and trying to track inventory across sales and purchasing, and then a suggestion for how to fix it if no one has a workaround.

Current Accounting Software
In our current accounting software, sales orders are only entered if they can either be fulfilled from stock or it is possible to obtain the goods to fill the order. Therefore, when an order is entered, our inventory reflects that to show the quantity reserved for orders and subtracts that from the available stock. Items are only invoiced when they are shipped out, and when an item is invoiced that quantity is removed from inventory. Similarly, with purchase orders, when we create and send a purchase order it then reflects in “Qty on order” column so we know we have generated a PO and sent it out. We then receive against the PO to add the items to our available stock. Eventually, an invoice is added for the PO to pay the supplier.

In essence, the sales flow is like this:

  1. Sales Quote (does not affect inventory nor accounting)
  2. Sales Order (quantity is reserved in inventory for this order, but is not removed from inventory nor does it affect accounting)
  3. Sales Invoice (quantity is removed from inventory and it is reflected in the Accounts Receivable)

And the purchase flow is like this:

  1. Purchase order (quantity shows as “on order” in for the inventory item, but the actual stock is not changed nor does it affect the accounting)
  2. Items are received against the PO (called Goods Receipt in Manager) which updates the stock in inventory
  3. We receive an invoice from the supplier which is entered and paid

Manager
The workflow is different in Manager and, from what I’ve been told by our accounting department and our sales department, we will have to find a different solution if we are unable to find a sufficient workaround or a change is made to the software. Here is what Manager does:

Sales flow:

  1. Sales Quote (does not affect inventory nor accounting)
  2. Sales Order (item is not removed from inventory nor does this affect accounting)
  3. Sales Invoice (quantity is moved to the “Qty to deliver” column and reflected in Accounts Receivable)
  4. Delivery Note (quantity is removed from inventory)

Purchase flow:

  1. Purchase Order is created (does not affect accounting nor inventory)
  2. Purchase Invoice is created (affects Accounts Payable and shows in “Qty to receive” column)
  3. Goods Receipt is created as items are received (moves inventory from “Qty to receive” to “Qty on hand”)

The Problem
Sales: We often receive orders for items that are on backorder and/or are initially only partially shipped. Manager shows items in the “Qty to deliver” column (which we would treat as backordered) only if we create an invoice. However, as the lead time on some of these items can be as long as 6 months, we only invoice items that are being sent in shipments. Customers do not appreciate receiving invoices for items that have not shipped, nor is that standard practice in our industry. If we only create invoices for the amount we are shipping, quantities are only removed from the “Qty on hand” in the inventory module and we have no way of keeping track of the backorders. Even worse, we have no way of viewing this for the customer either unless an invoice is created so it becomes practically impossible to keep track of for a large quantity of orders.

Purchasing: Our suppliers will quite often not invoice us for a month after we have received the items. I realize that we can enter these items into the Goods Receipt module which will add the items to inventory, but this creates 2 problems. 1) a negative quantity is shown under “Qty to receive”, 2) we have no way of keeping track which items we have submitted purchase orders for.

Important Note: Two things I should clarify.

  1. I realize that I can disable both the Delivery Notes and Goods Receipts modules which will cause the inventory to be changed with the Sales Invoices and Purchase Invoices…but this does not fix our problem. We need the functionality of both of those modules, we just need a way of keeping track of items that have been submitted as either Sales Orders or Purchase Orders.

  2. I read the aforementioned thread thoroughly and agree with the accounting principles discussed throughout. I do not propose to change the way that inventory is accounted for - I agree that the accounting should only be affected by invoices as those are actual accounting documents. What we need is a way of tracking inventory orders.

Proposed Solution
I propose that the “Qty to receive” and “Qty to deliver” columns can be either generated using the entered invoices (as is done currently) or orders (not currently available), or to have user configurable columns for the inventory module so we are able to properly track orders. Additionally, we should be able to see the quantities the customer has ordered from the customer module as well. @lubos I am not sure how difficult it would be to implement this, or if it is in the roadmap, but some input would be greatly appreciated. As I said, I agree with the accounting principles discussed in the previously linked thread; however, my solution would both 1) not affect the accounting side of things while 2) solving our problem as well as the problem of many other users in the previous thread as well as other threads I read (not linked).

Additionally, if anyone has any workarounds that would make this work from an accounting as well as an inventory tracking perspective, I’d be happy to hear them.

EDIT: Something else I just thought of as well. Generally, when items are backordered, there is a “Promise Date” entered into the system to prompt an employee to check on the status of the backorder. Also, the invoice would normally show two columns, one for backorder quantity and one for shipped quantity. I realize this is easy to see within Manager but the forms and PDFs generated do not show the customer that the items are backordered and will likely lead to confusion. Even if Delivery Notes are used, only the shipped quantity is shown and not the total amount ordered. A more complete backorder solution baked directly into Manager would be extremely useful, although with the new API coming we may generate our own PDFs based upon the information Manager gives us.

1 Like

Currently sales orders and purchase orders won’t have any effect on qty counts.

I do want to integrate them with inventory counts so you can see “what’s on order” and track fulfillment of these orders. This would also allow to implement low qty alerts to prompt you to order more items.

There is already an idea posted about this, see:

That idea mostly encompasses what we would like, except we would like it to show up as a column in the Orders, Customers and Inventory windows in addition to being able to run a report. Instead of having 6 columns devoted to inventory on the Inventory page, it might make more sense for it to be user configurable to their workflow (i.e. either show pending invoices or pending orders in those columns).

And when a Sales Order is partially invoiced & delivery note made, the next time from same sales order, delivery note or invoice should automatically bring only those items / those quantity not delivered yet. Once all delivered the sales Order should have a flag “completed” and should not allow delivery or invoice.

(From the previous thread). This would be great, but also show the amount that did not shipped / was not invoiced as backordered so the customer is not wondering where the rest of their stuff is when they receive their shipment, which generates more calls and is time consuming for sales staff. We have a large number of backorders and it is essential for our accounting system to deal with them well.

I realize that you probably have a huge list of feature requests and obviously have to prioritize them, as well as I’m not sure how Manager is written in the back end, but to just show the quantity columns it seems like a rather simple switch, perhaps something like this:

switch($qty_track_method) {
    case "orders":
          $purchase_qty_label = "Qty on order";
          $purchase_qty = $qty_purchase_order - $goods_delivery_qty;
          $ship_qty_label = "Qty for customer order";
          $ship_qty = $qty_sales_order - $delivery_notes_qty;
          break;

    case "invoices":
    default:
          $purchase_qty_label = "Qty to receive";
          $purchase_qty = $qty_purchase_invoiced - $goods_delivery_qty;
          $ship_qty_label = "Qty to deliver";
          $ship_qty = $qty_sales_invoiced - $delivery_notes_qty;
          break;
}

Our current accounting system is quite old and we quite urgently need to switch to a new system. We would like that new system to be Manager and to purchase a server license to deploy it on our server, but there are some essential features missing that we have to figure out first, of which this one quite possibly the most important: having proper inventory order and backorder tracking. The second would likely be being able to easily see history for customers and inventory items (see here).

This is the way I’m thinking to implement it too. As you can see, Manager already has all the data it needs to calculate these figures so this shouldn’t be far off.

1 Like

Since we are planning on trying to switch accounting software next month (to coincide with us finalizing our year end), any chance that this will be implemented before then?

@lubos would you be able to do this in manager
this is what we are looking for it this would be very easy to see forecast our import orders
our customer order items and pay deposit but they need item delivery in 2 to 3 months time so if this option is available we can issue sales order so we know how much stock is left

Sales flow:

  1. Sales Quote (does not affect inventory nor accounting)
  2. Sales Order (item is not removed from inventory nor does this affect accounting)

thanks
Jerry

hi @lubos

can you make this changes please

let me know if this is possible so i can go online version from 1 July

thanks
Jerry

just need simple once sales order generated in inventory qty it saw as on hold and balance qty available please please

Hi @lubos
Please work on this if possible
Happy to pay you for this perticular change