Understand the complete Sales Order Processing Cycle in TallyPrime. Learn how to create Sales Orders, record Delivery Notes, generate Sales Invoices, manage partial deliveries, and track pending customer orders with practical examples.
Sales Order Processing Cycle in TallyPrime: Sales Order → Delivery Note → Sales Invoice
The sales process does not always begin with an invoice. In many businesses, customers place orders first, goods are dispatched later, and the invoice is generated after the delivery is completed. This is where the Sales Order Processing Cycle in TallyPrime becomes useful.
TallyPrime allows businesses to record customer orders, track pending quantities, prepare delivery notes, and generate sales invoices without entering the same information repeatedly.
For example, imagine you run a wholesale electronics business. A customer orders 50 LED bulbs today but wants delivery in two separate batches. You may dispatch 30 bulbs first and the remaining 20 next week. Instead of creating a sales invoice immediately, you can record the order, issue delivery notes for each shipment, and generate invoices according to your billing process.
In this guide, you will learn how the complete sales order cycle works in TallyPrime, how to record each transaction, and how to track pending orders and deliveries.
What Is the Sales Order Processing Cycle in TallyPrime?
The sales order processing cycle is a sequence of transactions used to manage customer orders from the time an order is received until the goods are delivered and invoiced.
In TallyPrime, the standard process follows three main stages:
Sales Order: Records the products and quantities requested by the customer.
Delivery Note: Records the actual goods dispatched or delivered to the customer.
Sales Invoice: Records the final sale and creates the accounting entry.
Each stage serves a different purpose. A sales order confirms what the customer wants, a delivery note records what the business sends, and a sales invoice records what the customer must pay.
How the Sales Order Processing Cycle Works
Before creating vouchers in TallyPrime, it is important to understand how information moves from one stage to another.
Here is a simple example:
Suppose ABC Traders receives an order from XYZ Retailers.
Particulars | Details |
|---|---|
Customer Name | XYZ Retailers |
Product | LED Bulb 12W |
Order Quantity | 100 |
Rate per Unit | ₹80 |
Total Order Value | ₹8,000 |
First Delivery | 60 Units |
Second Delivery | 40 Units |
The transaction moves through the following stages:
First, ABC Traders creates a Sales Order for 100 LED bulbs.
Next, the business prepares a Delivery Note for 60 bulbs.
The remaining 40 bulbs stay pending for delivery.
After the first shipment, the business creates a Sales Invoice for the delivered quantity, according to its billing arrangement.
When the remaining goods are delivered, another delivery and invoice can be recorded if required.
This approach helps maintain accurate order and stock records.
Enable Sales Order Processing in TallyPrime
Before using the sales order cycle, you may need to enable the relevant voucher features in your company.
Follow these steps:
Open your company in TallyPrime.
Press F11 (Features).
Look for the inventory-related or voucher configuration options.
Enable the option for Sales Order Processing, if available in your release.
Enable the required delivery note and tracking number features.
Save the configuration.
The exact configuration options may vary depending on your TallyPrime release and company settings.
Once the required features are enabled, you can start recording sales orders, delivery notes, and sales invoices.
Create a Sales Order in TallyPrime
A Sales Order is the first voucher in the order processing cycle. It records the customer's requirements before the actual goods are dispatched.
For example, XYZ Retailers places an order for 100 LED bulbs at ₹80 each.
Follow these steps to create the Sales Order:
Open Gateway of Tally.
Go to Vouchers.
Press F10 (Other Vouchers).
Select Sales Order.
Enter the order date.
Select the customer ledger.
Enter the required order details.
Select the stock item.
Enter the order quantity and rate.
Review the details and save the voucher.
Example of Sales Order Entry
Field | Value |
|---|---|
Voucher Type | Sales Order |
Party Name | XYZ Retailers |
Stock Item | LED Bulb 12W |
Quantity | 100 Nos. |
Rate | ₹80 |
Total | ₹8,000 |
After saving the voucher, TallyPrime records the customer's order.
Important: A Sales Order is not the same as a Sales Invoice. It records the order commitment but does not normally create a regular sales accounting entry or reduce actual stock.
Create a Delivery Note Against the Sales Order
After receiving the order, the business prepares the goods for dispatch.
A Delivery Note records the actual quantity sent to the customer. It also helps maintain accurate stock movement.
Suppose ABC Traders can dispatch only 60 out of the 100 LED bulbs ordered by XYZ Retailers.
Instead of closing the entire order, you can create a Delivery Note for 60 units.
Follow these steps:
Open Gateway of Tally.
Go to Vouchers.
Press F10 (Other Vouchers).
Select Delivery Note.
Enter the delivery date.
Select the customer ledger.
Link the relevant Sales Order using the order reference or tracking details.
Select the stock item.
Enter the actual delivered quantity.
Check the details and save the voucher.
Example of Delivery Note Entry
Field | Value |
|---|---|
Customer | XYZ Retailers |
Original Order Quantity | 100 Nos. |
Delivered Quantity | 60 Nos. |
Pending Quantity | 40 Nos. |
Stock Item | LED Bulb 12W |
After saving the Delivery Note, TallyPrime updates the inventory records according to the voucher configuration.
The original Sales Order remains partially pending because 40 units have not yet been delivered.
How to Record Partial Deliveries
One useful feature of the sales order cycle is that you do not need to deliver the entire order in one shipment.
For example:
Original order: 100 units
First delivery: 60 units
Second delivery: 40 units
You can create separate Delivery Notes against the same Sales Order.
This is particularly useful for wholesalers, distributors, manufacturers, and businesses that supply goods in multiple shipments.
Create a Sales Invoice Against the Delivery Note
Once the goods have been delivered, the next step is to prepare the Sales Invoice.
A Sales Invoice records the actual sale, calculates applicable taxes, and creates the accounting entry.
For example, if ABC Traders has delivered 60 LED bulbs, it can prepare an invoice for those 60 units.
Follow these steps:
Open Gateway of Tally.
Go to Vouchers.
Press F8 (Sales).
Select the customer ledger.
Choose the relevant Delivery Note or tracking reference when prompted.
Select the delivered stock items.
Verify the quantity and selling rate.
Enter applicable GST details, if required.
Check the invoice total.
Save the Sales Invoice.
Example of Sales Invoice Entry
Particulars | Amount |
|---|---|
Product | LED Bulb 12W |
Quantity | 60 Nos. |
Rate | ₹80 |
Taxable Value | ₹4,800 |
GST (18%) | ₹864 |
Invoice Total | ₹5,664 |
The GST calculation above is an illustrative example. The actual tax rate and place-of-supply treatment depend on the product classification and transaction details.
After saving the invoice, TallyPrime records the sale and updates the customer's outstanding balance.
Note: The invoice should be linked to the appropriate delivery reference so that the order and dispatch records remain connected.
Complete Sales Order Processing Example
Let's understand the entire process using one practical business example.
ABC Traders receives an order for 100 LED bulbs from XYZ Retailers.
The selling price is ₹80 per unit, excluding GST.
The business dispatches the goods in two batches.
Transaction | Quantity | Taxable Amount |
|---|---|---|
Sales Order | 100 | ₹8,000 |
First Delivery Note | 60 | ₹4,800 |
First Sales Invoice | 60 | ₹4,800 |
Second Delivery Note | 40 | ₹3,200 |
Second Sales Invoice | 40 | ₹3,200 |
Total Invoiced | 100 | ₹8,000 |
This example assumes that each delivery is invoiced separately and excludes GST from the table.
After completing both deliveries and invoices:
Total ordered quantity: 100 units
Total delivered quantity: 100 units
Total invoiced quantity: 100 units
Pending delivery quantity: 0 units
The order is now fully completed.
Difference Between Sales Order, Delivery Note and Sales Invoice
Although these three vouchers are connected, each has a different purpose in TallyPrime.
Feature | Sales Order | Delivery Note | Sales Invoice |
|---|---|---|---|
Main Purpose | Record customer order | Record goods dispatched | Record actual sale |
Created When | Order received | Goods dispatched | Invoice prepared |
Affects Stock | No direct physical stock reduction | Yes | Yes, depending on invoice configuration |
Creates Sales Entry | No | No | Yes |
GST Calculation | Not normally | Not normally | Yes, when applicable |
Tracks Pending Orders | Yes | Yes, through order tracking | Helps complete billing |
Remember: The Delivery Note and Sales Invoice should be linked correctly. If inventory is configured to be updated through the Delivery Note, avoid unintentionally recording the same stock movement again through a separate invoice configuration.
How to Check Pending Sales Orders in TallyPrime
Tracking pending orders is important for businesses that handle multiple customers and frequent deliveries.
TallyPrime provides inventory reports that help you review order-related information.
To check pending orders:
Open Gateway of Tally.
Go to Display More Reports or the relevant reporting section.
Open Inventory Books or Statements of Inventory, depending on your release.
Look for the Sales Order Book or outstanding order-related report.
Select the required period or party.
Review the pending order quantities.
You can use this information to identify:
Orders that have not been delivered.
Orders that have been partially delivered.
Customers waiting for pending products.
Orders that have been completed.
Products required for upcoming dispatches.
This makes it easier for sales and inventory teams to coordinate their work.
Benefits of Using the Sales Order Processing Cycle
Using Sales Order, Delivery Note, and Sales Invoice vouchers together offers several practical advantages.
Better order management: You can record customer requirements before preparing the goods.
Accurate inventory tracking: Delivery Notes help record actual goods dispatched and maintain stock movement records.
Easy partial deliveries: You can dispatch goods in multiple batches without creating a completely new order each time.
Reduced data entry: Linking vouchers helps carry forward transaction details instead of entering everything manually.
Improved customer service: Sales teams can check pending quantities and provide more accurate delivery updates.
Better accounting records: Sales Invoices maintain proper sales and customer outstanding records.
Less confusion: Keeping orders, deliveries, and invoices separate makes it easier to identify differences between ordered, dispatched, and billed quantities.
Common Mistakes to Avoid in Sales Order Processing
Even though the process is straightforward, a few mistakes can create problems in inventory and accounting records.
Creating an invoice before dispatch: Follow the correct billing process for your business and applicable tax requirements.
Entering the wrong delivery quantity: Always verify the physical quantity before saving the Delivery Note.
Not linking vouchers: Use the correct Sales Order and delivery references to maintain transaction continuity.
Ignoring pending quantities: Review outstanding orders regularly to avoid missed deliveries.
Using incorrect stock items: Confirm the item name, unit, and rate before saving each voucher.
Duplicate stock entries: Check inventory voucher settings to prevent the same dispatch from reducing stock twice.
Incorrect GST details: Verify tax ledgers, rates, and transaction classification before generating invoices.
A simple review of each transaction before saving can prevent many of these issues.
Best Practices for Managing Sales Orders in TallyPrime
For smoother sales operations, follow these practical habits:
Record every confirmed customer order in a Sales Order voucher.
Use meaningful order references for easy identification.
Prepare Delivery Notes only for goods actually dispatched.
Record partial deliveries against the original order.
Generate invoices with the correct delivery references.
Review pending orders regularly.
Reconcile ordered, delivered, and invoiced quantities.
Keep customer and stock item details updated.
These practices are especially helpful when dealing with bulk orders, multiple shipments, and regular business customers.
Conclusion
The Sales Order Processing Cycle in TallyPrime helps businesses manage the complete sales journey, from receiving a customer order to delivering goods and generating the final invoice.
By using Sales Order, Delivery Note, and Sales Invoice vouchers together, you can maintain better control over customer orders, stock movement, pending deliveries, and sales accounting.
Whether you operate a wholesale business, retail store, distribution company, or manufacturing unit, this workflow can make your daily sales operations more organised and reliable.
The most important thing is to understand the purpose of each voucher and link them correctly. Once you become familiar with the process, managing even large and partially fulfilled orders becomes much easier.
Frequently Asked Questions (FAQs)
1. What is a Sales Order in TallyPrime?
A Sales Order is a voucher used to record the products and quantities requested by a customer before the goods are dispatched.
2. What is the purpose of a Delivery Note?
A Delivery Note records the actual goods dispatched to a customer and helps maintain accurate inventory records.
3. Can I create multiple Delivery Notes against one Sales Order?
Yes. You can record multiple partial deliveries against a single Sales Order using the appropriate order references.
4. Does a Sales Order reduce stock in TallyPrime?
No. A Sales Order records the customer's requirements but does not directly reduce physical stock.
5. Can I create a Sales Invoice directly from a Delivery Note?
Yes. You can link the relevant Delivery Note while creating a Sales Invoice, subject to the voucher configuration and tracking settings.
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