Sterling Selling and
Fulfillment Foundation
processes a standard Sales Order.
A standard sales order is process as follows:
Order creation
On a sales order line creation and draft sales order
confirmation, Sterling Selling and
Fulfillment Foundation uses
the following logic to retrieve the unit cost of each item:
- If the unit cost was overridden on the order line, Sterling Selling and
Fulfillment Foundation uses
the override cost as the unit cost.
- When Replacement Cost is used as the basis for
unit cost computation:
- If the unit cost was manually entered at the item
level in the product master tables, the order line uses the manually
entered unit cost
- Ιf no manual entry was made, the order line uses
the computed unit cost stored at the item level. If no such cost was
stored, the cost is reflected as $0.00 on the sales order line and
the ORDER_CREATE.ON_ZERO_UNIT_COST event is triggered.
- Logical kit unit cost is stored at the component
level and is maintained at this level.
- When Average Cost is used as the basis for unit
cost computation: this cost basis is not supported in this release.
- If the unit cost was overridden on the order line,
the order line uses the specified cost as the unit cost.
- A ship node must be identified on the order line
for computing the unit cost. If no ship node is specified, unit cost
is not stored and shows as $0.00.
- Whenever a ship node is specified on the order
line, Sterling Selling and
Fulfillment Foundation stores
the unit cost from the item-node level. If a change is made to the
ship-node of an order line, the unit cost of the order line is picked
up from the new node.
Shipment confirmation
- When product is shipped, Sterling Selling and
Fulfillment Foundation recalculates
the Inventory Value for the fulfillment location. See the calculation
for Inventory Value in Inventory costing.
- When a shipment is confirmed in Sterling Selling and
Fulfillment Foundation, Sterling Selling and
Fulfillment Foundation publishes
the information to be used in a Financial application.
- The Shipment Confirmation event is used to update
general ledger entries for cost of goods sold, inventory and various
variance accounts. This event is published for each order line separately
and Sales and A/R postings should typically be made through the invoice
publishing event.
Invoice creation
Sterling Selling and
Fulfillment Foundation invoice
publication interface posts the sales and account receivable general
ledger entries.
Standard sales order scenarios
Note: Though not illustrated in these scenarios, cost factor
retrieval is a standard part of cost calculation.
Standard sales order - scenario 1 -
see Figure 1
A customer places an order for a quantity of 2 pieces
of item ABC. The order is priced according to pricing rules for the
customer. The expected Unit Cost of ABC is also stamped on the order
line as ship node determination has been done during order creation.
The fulfillment location reports shipment of ABC, at which time the
inventory value change event is published detailing the various cost
buckets. When the invoicing transaction runs, the appropriate Financial
application interface entries are generated with shipped quantity
and sales price.
- Order Creation
- Order is priced according to the price list defined
by the seller
- Unit Cost is stamped on the order line based on
the primary supplier of ABC.
- Shipment Confirmation
The average
cost of item ABC and the fulfillment location is recorded for the
shipment or order line.
- Sterling Selling and
Fulfillment Foundation recalculates
the Inventory Value
- Current Inventory
Value = $250
- Current Average
Cost = $2.05725
- Value of shipment = 2*2.05725 = $4.1145
- New Inventory Value = $245.8855
- Sterling Selling and
Fulfillment Foundation publishes
the Inventory Change information (used for integration to financial
applications).
- Invoice Creation
- The sales order invoice does not publish any cost
related data
- All cost-related data recorded during shipment
confirmation (step 2) is passed
- An invoice can trace to the contained shipments
through shipment number to obtain the cost data if needed. The invoice
carries all price related information about the transaction that is
used to form the corresponding Accounts Receivable entries.
Figure 1. Sales order scenario 1
Standard sales order - scenario 2 -
see Figure 2
A customer places an order for a quantity of 10 pieces
of item ABC. The order is priced according to pricing rules for the
customer. The expected Unit Cost of ABC is also stamped on the order
line. The order is scheduled, and it is determined that fulfillment
is from Node1 (quantity=7) and Node2 (quantity=3). The order is released.
The fulfillment locations report shipment of ABC, at which time the
inventory value change event is published detailing the various cost
buckets. When the invoicing transaction runs (using SHIPMENT based
invoicing), the appropriate Financial application interface entries
are generated with shipped quantity and sales price.
- Order Creation
- The Order is priced according to the price list
defined by the seller
- Unit Cost is stamped on the order line based on
the primary supplier of ABC
- Schedule
The Order Line is split
into two schedule entries to represent 2 fulfillment sources – Node1
and Node2
- Release
Sterling Selling and
Fulfillment Foundation creates
an order release for each node to carry out against the order line
- Shipment Confirmation – Node1
Sterling Selling and
Fulfillment Foundation records
the average cost of item ABC/fulfillment location for the shipment
or order line.
- Sterling Selling and
Fulfillment Foundation recalculates
the Inventory Value for Node1
- Sterling Selling and
Fulfillment Foundation publishes
the Inventory Change information (used for integration to financial
applications).
- Sterling Selling and
Fulfillment Foundation repeats
steps 4-6 for Node2
- Invoice Creation
- The sales order invoice does not publish any cost
related data
- All cost-related data recorded during shipment
confirmation (step 4) is passed.
- An invoice can trace to the contained shipments
through shipment number to obtain the cost data if needed. The invoice
carries all price related information about the transaction that is
used to form the corresponding Accounts Receivable entries.
Figure 2. Sales order scenario 2