Streamline your sales workflow for Accounting

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in the video today i will explain the overview of the order to cache or the sales process with the related accounting entries for the procure to pay or purchasing process i have already explained the most important parts in accounts payable and in integration between financial accounting and the materials management in sap is for hana and i have organized all the videos in the right sequence in a playlist for accounts payable i will leave you a link here you can watch it if you are interested now i will start doing the same for the order to cache or the sales process so today i will start with the process overview and in the future videos i will go into the details of the process with demonstration on saps for hana so if you have any topic or any point you want me to cover in this new playlist especially if this point is related to integration between sales and distribution and finance or anything related to accounting in the order to cash process leave me a comment below also don't forget to subscribe to the channel so you can see the future videos let's go let's go back to our example we have a company that produces and sells shares and for us the sales process or the order to cash process starts when we receive an inquiry from one of our customers so the customer is asking about a specific product how long does it take to make the product available how long does it take to deliver the product how much is it whether there are discounts or not what are the payment terms what are the shipping conditions and so on then we respond to this inquiry with a quotation so the quotation includes the answers to all the questions we received from the customer then if the customer is okay with our quotation he will send us a purchase order and then from our side we are going to create a sales order with reference to the customer's purchase order the sales order will include all the details of the sales process and this is the most important document we have here as it includes everything what we are selling what is the price whether there are discounts what is the payment term when is the shipping date and all the other details then before the shipping date we are going to create an outbound delivery this is a note to the warehouse team telling them that we are going to sell a salesman product at a certain date then the warehouse team based on this note they will start picking the products and packaging them for shipping this is called picking and packing and then on the shipping date we come to the actual goods issue this is when we actually issue the products from our warehouse either to the shipping company or to the customer and this is where we have our first financial impacts our first accounting entry all the steps before the goods issue have no impact at all on finance and the entry we have when we do the goods issue is a debit to cost of goods sold and a credit to the finished goods inventory the financial entry can be different between different companies but we will go into more details later after they got the issue we have billing this is where we issue the billing document or the customer invoice and here we have another financial entry a debit to the customer account under accounts receivable and accredited to the sales revenue account then we receive the incoming payment from the customer and we have another financial entry that depends on how we receive the payment but generally the financial entry will be a debit to the bank account or cash for example and the credit to the customer account under accounts receivable then we do something we call clearing this is where we assign the payment to the customer invoice so we can mark this invoice as paid this is the generic overview of the order to cash process you can find it in the different courses that cover the overview for example the sap business process integration this is also the ideal answer you can give when you are asked about the order to cache process in an interview but of course in real life this process can be completely different between different companies for example we can have the billing before the goods issue we can also have payment before goods issue or billing as a down payment and there are many different variations of this process we will go into the different details in future videos in the next videos i'm going to demonstrate this process on sap s4hana using sap gui and sap fury so don't forget to subscribe to the channel to see the new videos if you are interested thank you for watching and i'll see you again soon