For example, I have a sales order which i received from client in December 2019 and received 50% of the amount as advance along with it in the same month. And I am starting a new ERPNext system in January 2020 with opening entries and opening balances. I am delivering the items against the sales order in January 2020.
I need to create delivery notes(DN) and sales invoices(SI) for that Sales Order (SO) in the ERP.
What is the best way to create the SO in the ERP system? I guess I cannot show the advance received against the SO since it was received in 2019. I cannot create the SO with balance 50% amount since I need to create DN with full item list and SI which shows advance received and balance payment.
While you do not wish to keep records of 2019 , it is advisable to have transactions of 2019 which were not logically concluded in 2019 and are open status while in 2020 , so best way is
1 create an SO in 2019 ,
2 create payment receipt entry in 2019 so that your bank balance will show appropriate debit and your customer ledger will show credit which will ultimately c/f to 2020
The above will ensure that while you are retaining transactions of 2019 for opening balances for the consumption of internal and external auditors too and for you the traceability and history of SO ,bank balance , bank reconciliation and customer ledger.
Yes, I understand that. However, you could just do this single advance payment as the only transaction in 2019 solving your problem without complexities.
Sound good to create the SO in 2019 and create a payment entry in 2019 against the advance payments.
Another query, if i delivered half of the items for the SO in 2019 and i will deliver the other half in mid of January 2020, how will i account for the first half delivered items?
In this case Since you are intending to use erpnext only for 2020 and not for 2019 , you may book SO only for SO pending quantities and corresponding advance received , I you intend to user erpnext for 2019 also then booking of complete SO , complete receipt of advance received and raising invoice adjusted against advance etc can be done.
i intend to use erpnext only for 2020. If i book SO in 2020 for only pending quantities, i cannot create sales invoice for complete quantities to send to the customer.
then i think, i need to create the pending quantity SO in 2020, create DN for the pending quantities in 2020 and create Sales invoice for pending quantities in 2020. i can submit two invoices to the customer. One for the earlier delivered item in 2019 as manual invoice and one for the pending items in 2020 from erpnext.
Yes logically your approach is correct since at year end , you would anyways have to raise invoice for delivered quantity as well adjust the advance received to the extent of quantity delivered.