The Sales Cycle in ERP

Every manufacturing business exists to sell what it produces. Whether the product is fabricated steel brackets, CNC-machined shaft components, or packaged food items, the journey from a customer enquiry to cash in the bank follows a predictable sequence of steps. In a manual environment, each step lives in a different register, spreadsheet, or someone's memory. In an ERP system, the entire sequence is connected — each document links to the next, data flows automatically, and nothing falls through the cracks.

This chapter maps the end-to-end sales cycle as implemented in Udyamo ERP Lite and explains why managing sales through an integrated system is fundamentally different from managing sales through disconnected tools.

What You Will Learn

• The complete sales cycle from customer enquiry to payment receipt
• How each document in the cycle links to the next (document flow)
• The difference between make-to-order and make-to-stock selling
• How credit management protects your cash flow
• The sales metrics an ERP system enables automatically

Prerequisites

• A basic understanding of your company's sales process
• Familiarity with the Udyamo ERP Lite dashboard (Chapter 4)

The End-to-End Sales Cycle

The sales cycle in Udyamo ERP Lite follows this sequence:

Enquiry --- A customer contacts you asking about product availability, pricing, or delivery timelines. While Udyamo ERP Lite does not have a formal enquiry module, this is the trigger that starts the process.

Proforma Invoice (Quotation) --- You respond with a proforma invoice detailing the items, quantities, unit prices, applicable taxes (GST with HSN codes), and a validity period. This is not a tax document — it is a price confirmation and commercial offer.

Sales Order --- Once the customer accepts the quotation, you create a sales order. This is a confirmed commitment to supply the specified goods at the agreed terms. A sales order can be created by converting a proforma invoice or by manual entry.

Delivery --- You ship or hand over the goods to the customer. Inventory is adjusted to reflect the outward movement.

Tax Invoice --- You issue a GST-compliant tax invoice. The invoice can be generated from the sales order (fully or partially, depending on how much has been delivered) or created independently. The system calculates CGST, SGST, or IGST based on the customer's location and generates the corresponding accounting journal entry.

Payment Receipt --- The customer pays — in full or in part — by cash, cheque, bank transfer, or UPI. The payment is recorded against the invoice, updating the balance due and the invoice status.

Document Flow — Why It Matters

In Udyamo ERP Lite, every sales document carries references to the documents that came before it and after it. A tax invoice knows which sales order it was created from. That sales order knows which proforma invoice generated it. This chain of references is called the document flow.

Document flow delivers three critical benefits:

1. Traceability. If a customer disputes an invoice amount, you can trace it back to the sales order and the original proforma to verify what was agreed.
2. No duplication. The system prevents you from invoicing the same sales order line item twice. It tracks invoiced quantities against ordered quantities and only allows invoicing for the remaining balance.
3. Status tracking. Each document's status updates automatically based on downstream events. When all items on a sales order are invoiced, the order status changes to "fully invoiced." When an invoice is fully paid, its status changes to "paid."

The following table shows how statuses propagate across the sales cycle:

Make-to-Order vs. Make-to-Stock

Manufacturing businesses typically follow one of two sales strategies, and Udyamo ERP Lite supports both:

Make-to-Stock (MTS). You manufacture finished goods in advance and hold them in inventory. When a customer orders, you fulfil from existing stock. This is common for standardised products — fasteners, fittings, packaged food items. The sales cycle is straightforward: sales order, pick from stock, invoice, and collect payment.

Make-to-Order (MTO). You manufacture only after receiving a confirmed customer order. This is common for custom-fabricated parts, specialised machine components, or products with customer-specific specifications. The sales cycle here is longer: the confirmed sales order triggers a production order (covered in Part 3), production consumes raw materials, finished goods are received into inventory, and only then can you deliver and invoice.

In both cases, the sales documents in Udyamo ERP Lite remain the same. The difference is in timing — whether production happens before or after the sales order.

Credit Management Basics

Extending credit is standard practice in B2B manufacturing sales. A distributor of machined components might expect 30 or 45 days to pay after receiving an invoice. Udyamo ERP Lite helps you manage credit exposure through two fields on the customer master:

• Credit Limit --- The maximum total outstanding amount you are willing to carry for a customer at any point in time. If a customer's unpaid invoices already total their credit limit, the system alerts you before creating new orders.
• Credit Days --- The number of days from invoice date by which payment is expected. This drives the due date calculation on invoices and determines when an invoice is flagged as overdue.

Tip: Set credit limits and credit days on every business customer from the start. It is far easier to enforce credit discipline when the rules are established upfront than to impose limits after a customer has developed a habit of late payment.

Sales Metrics the ERP Enables

Because every transaction flows through a single system, Udyamo ERP Lite can generate sales intelligence that would be impossible with disconnected tools:

These metrics appear in the operational reports covered in Chapter 47.

Tips & Best Practices

Tip: Always start the sales cycle with a proforma invoice, even for repeat customers with standard pricing. The proforma creates a documented record of what was agreed and serves as the foundation for the sales order and invoice.

Tip: Use the expected delivery date on sales orders to plan production and logistics. When sales orders carry realistic delivery dates, your production team can prioritise work accordingly.

Warning: Do not skip the sales order step and jump directly from proforma to invoice unless you are dealing with a simple, immediate sale. The sales order provides a confirmed commitment that helps with production planning, inventory reservation, and partial invoicing.

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