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Is it wise to use (( Back Orders )) in sales registration ??
i.e: In some companies if you got a P.O from your customer today, it will not be registered into your sales report for this month, however it will be registered once this invoice is paid and invoiced. That time - let us say after3-4 months it is registered in sales record as "Back Order".
I think this is not wise method, as it will shows misleading sales figures for some months.
I believe that sales must be registered once you receive the P.O from customer, not at the time once it is invoiced.
Who agree and who disagree with me ?
Is it wise to use back orders?
While back orders can exist due to a number of reasons they are largely present due to the inability of an organisation to fulfil customer orders on time and in full (OTIF). Since time is constant and not static the notion of back orders is false. Unfulfilled orders should be revised with a new delivery date and planned as part of business as usual organisational activities. Adopting a forward looking view is part of the solution. This is not to say fulfillment of orders should not be measured against the original due date.
If you would like anymore details on how to manage back orders for your organisation do not hesitate to get in touch.
minimal back orders in sales registration can be used to meet sales deficiency in order to provide better averaging forecast to sales and inventory targets
I partially agree and disagree, as sales numbers could be mislead. Back Orders could be done very exceptionally depending on the credibility of the sales staff and the customer. It is better to avoid it, as if that sales has to happen will happen and be accounted for the next month.
