How to Handle Backorders and Partial Shipments With Sales Orders in QuickBooks Desktop

Before you start

• Sales orders are in QuickBooks Desktop Premier and Enterprise. Turn them on in Edit > Preferences > Sales & Customers > Company Preferences with Enable Sales Order.
• Inventory has to be on: Edit > Preferences > Items & Inventory > Company Preferences, then Inventory and purchase orders are active.
• On the same screen, Warn if not enough inventory to sell warns you when a sale would take more than you have.
• Shipping from more than one warehouse needs Advanced Inventory with Multiple Inventory Sites turned on. Intuit includes Advanced Inventory in the Enterprise Platinum and Diamond subscriptions only.
• The pick, pack and ship worksheet has its own Advanced Inventory setting. Open Advanced Inventory Settings on the same screen, then select Sales Order Fulfillment Worksheet under Site Operations.
• Linking sales order lines to purchase orders needs QuickBooks Desktop Enterprise 24.0 release R9 or later.

Step 1: Enter the full order, even if you can't fill it today

Put everything the customer ordered on one sales order. Intuit suggests sales orders for this case. They track the backorder until you have the stock to invoice it.

1. 1Go to Customers > Create Sales Orders.
2. 2Choose the customer in Customer:Job and enter every line at the full quantity ordered.
3. 3With multiple inventory sites on, choose the warehouse in the Site column on each line.
4. 4Select Save & Close.

Intuit's Enterprise guide says each sales order line can show the item's on-hand, committed, pending-build and on-order quantities. Use that to give the customer a realistic date for the backordered part.

Step 2: Invoice what ships

1. 1Open the sales order and select Create Invoice.
2. 2Choose Create invoice for selected items.
3. 3In the To Invoice column, enter what is shipping on each line. Enter 0 for lines that aren't shipping.
4. 4With multiple sites, check the Site on each invoice line. One invoice can draw stock from more than one site.
5. 5Select Save & Close.

The sales order now tracks what was invoiced and what is backordered, line by line. Ship the next part the same way, from the same sales order, as stock arrives. The basics are in how to turn a sales order into an invoice.

Step 3: See every open backorder

With hundreds of open orders, work from reports rather than opening sales orders one by one.

• Reports > Sales > Open Sales Orders by Item: open demand for each item across all customers. Use it to decide what to reorder or build.
• Reports > Sales > Open Sales Orders by Customer: each customer's open orders. Intuit notes the default version shows each order's total, not item detail or just the open part.
• Reports > Inventory > Quantity on Hand by Site or Inventory Stock Status by Site: stock in each warehouse, once multiple inventory sites are on. Use them to see where a backorder can ship from.
• Select Customize Report on any of these to add or remove columns, then Memorize it so you can rerun it.

Step 4: Build an open-lines report grouped by customer

For a customer-by-customer list of the items still open, Intuit's workaround starts from a purchase report.

1. 1Go to Reports > Purchases > Open Purchase Orders by Job.
2. 2Select Customize Report.
3. 3On the Display tab, choose Type, Date, Num, Source Name, Item, Item Description, Qty, Open Balance and Amount.
4. 4On the Filters tab, set Transaction Type to Sales Order, Paid Status to Open, and Received to Either.
5. 5On the Header/Footer tab, rename the report, for example Open Sales Order Detail by Customer.
6. 6Select OK, then select Memorize to save it.

Step 5: Order the backordered items from the supplier

In Enterprise 24.0 release R9 and later, you can raise the purchase order from the sales order and keep the two linked.

1. 1Go to Edit > Preferences > Items & Inventory > Company Preferences.
2. 2Select Link and track sales order line items with purchase orders, then OK. QuickBooks closes open windows to apply it.
3. 3Open the sales order and select Create Purchase Order.
4. 4Choose all allowed items, or select just the backordered lines, then select OK.
5. 5Back on the sales order, a new column links each line to its purchase order.
6. 6To track them all, go to Reports > Sales > Sales Orders Linked to Purchase Orders. It shows each line's purchase order and the quantity received.

Buying one item from two suppliers? Put each supplier's quantity on its own sales order line, and link each line to that supplier's purchase order. Receipts then match the right supplier. When goods arrive, receive inventory against a purchase order, then invoice the next shipment from the sales order.

Step 6 (Enterprise): Run fulfillment from the Sales Order Fulfillment Worksheet

The worksheet puts open sales orders on one dashboard with their status: Open, Picked, Packed or Shipped. Turn it on as described in Before you start, then go to Customers > Sales Order Fulfillment Worksheet.

1. 1On the Dashboard tab, sort by any column to find the orders to work on first.
2. 2Select orders and choose an action: Send for picking, Send for packing, Print shipping label or Mark as shipped.
3. 3On the Pick tab, select the orders, select Next, then send the pick list to a paired scanner or print it. Filters on the tab narrow the lists by site, status or picker.
4. 4Without a scanner, open the pick list, enter the quantity picked for each item and select Update sales order. The order moves to Picked or Partially picked.
5. 5Pack and ship, or skip steps. Intuit supports Pick > Pack > Ship, Pick > Ship, Express pick-pack > Ship, or Ship only.

Clear stale statuses regularly. If an order shipped but still shows as partly picked or packed, select it on the Pick, Pack or Express pick-pack tab. Then choose Update Sales order and Complete.

Intuit's Enterprise guide also describes creating invoices in a batch from the worksheet, and a prompt to invoice when you mark an item as shipped.

Where QuickBooks Desktop leaves the work to you

• Open sales order reports only count orders that have been entered. Orders still sitting in email or PDFs don't show up as demand.
• Someone has to decide what ships from which warehouse and enter the right quantities on each invoice.
• Purchase orders for backordered items need follow-up until the supplier confirms a date and quantity.
• Customers ask when the rest is coming. Someone has to look up the purchase order and reply.
• Stale pick and pack statuses build up on the worksheet unless someone clears them.

How Logistify helps

Logistify doesn't ship or invoice orders. The Sales Order Service enters customer orders into QuickBooks Desktop as sales orders, so open sales order reports show the demand you've been sent. A person reviews exceptions. The Procurement Service follows up with suppliers on the purchase orders behind your backorders. It captures confirmed dates and quantities and routes exceptions to your team. Your team keeps the buying decisions.

For the supplier side, see how to follow up on late supplier orders.