Understanding the Sell from Stock Process

The process starts with the creation of a standard sales order. Depending on the customer and material ordered, various functions are performed during order entry, such as pricing, material availability checking, order scheduling and the creation of output documentation (for example an order confirmation).

An outbound delivery is created to manage the process of shipping the order to the customer.

Picking slips are generated to enable the warehouse to identify and pick the ordered material for shipment to the customer. If sufficient material is found in the required storage location, the process proceeds normally. If not, a stock replenishment may be required. Once picking is complete, the picked quantity is recorded in the system to ensure there are no differences between the sales order and the outbound delivery.

After the completion of picking, the shipping specialist posts goods issue for the outbound delivery. Goods issue records the physical quantity of inventory that is shipped to the customer. In addition, the cost of goods sold is recorded in financial accounting.

Once goods issue has been posted, a billing document is created to invoice the delivery. In accounting, postings are made to the revenue and customer receivables accounts.

And here is a simplified process diagram:

The following are the main activities in the process:

1. The Create Sales Order step confirms the intention of the customer to buy the goods and initiates the process.
2. The Create Delivery step initiates shipping of the goods.
3. The Execute Picking step executes picking of the goods from the warehouse and their preparation for shipment.
4. The Post Goods Issue step confirms the shipment of the goods.
5. The Create Billing Document step creates and sends the invoice to the customer for payment.