Once the customer accepts the sales quotation provided by The Bike Company, a sales order is created with reference to the sales quotation, using the Manage Sales Quotations app. This is the second step in the MTO process.
Note
In practice, it may be necessary to send the customer an adjusted sales quotation several times until the customer accepts the quotation.
Note
It is also possible to create a sales order without reference to a sales quotation. In this case, create a new sales order in the Manage Sales Orders app.
A sales order is a binding agreement between a sales organization and a customer for products. A sales order is a specific sales document category. You can use it to record and track the sale of products to a customer. These products can be goods (materials), but also services or immaterial goods. A sales order outlines the conditions agreed upon by both parties. It details the delivery of a specific quantity of products (goods or services) for a defined price at a certain time.
When creating a sales order with reference to a sales quotation, a lot of information from the sales quotation is transferred to the sales order. As a sales order is a sales document as well, it is also structured in a header, items, and schedule lines. In addition to the information transferred from the sales quotation, a sales order header and / or item may contain a billing plan. A billing plan is a schedule of individual billing dates specifying when a specific amount or percentage rate will be billed (also known as billing plan items). The billing plan also includes a billing type which is central for the creation of billing documents after goods have been delivered to the customer. Billing plans are particularly important in complex projects.
Process Flow
When a sales order is created with reference to a sales quotation, this results in a document chain. A sales order also triggers different follow-up processes, such as delivery processing. Thus, it has close connections to subsequent documents like delivery documents or billing documents. This document chain or document flow can be checked in the process flow diagram of the sales order to get an overview of all preceding documents and subsequent documents.
The sales order status and the process flow can also be checked using the Track Sales Orders app.
Hint
In the Track Sales Orders app, you can check whether a sales order's fulfillment is on track. You can immediately recognize whether a sales order contains issues, and whether it is complete or still in process.
For example, you can see whether it has been shipped or invoiced, and identify the respective documents. If, for example, a customer or a manager asks for information about one or more orders belonging to a specific customer, you can use this app to provide the information quickly.
Cost Estimate for Sales Order
When a sales order is created in an MTO scenario, a sales order cost estimate is created using the costing variant PPC4 (Sales Order Costing) and marked automatically. In the cost estimate, each material in the sales order, along with its BOM and routing, is used and valuated.
The sales order cost estimate can be used to determine the standard costs of the individual requirements material included in the sales order.
You can check the created cost estimate in the Display Sales Orders - Cost Estimates app.
Summary
The second step in the MTO process is to create a sales order with reference to the sales quotation.
A sales order is a binding agreement between a sales organization and a customer that outlines the delivery of a specific quantity of products (goods or services) for a defined price at a certain time.
A sales order is structured in a sales order header and one or several items. Each item then contains one or more schedule lines.
A lot of information is transferred from the sales quotation to the sales order, but additional information can also be added, such as a billing plan.
When a sales order is created in an MTO scenario, a sales order cost estimate is created and marked automatically.