Sales Cycle

Overview

Below is a business‑focused explanation of the Sales Cycle in Dafater, written for business owners, sales managers, and operations teams.

1. Overview of the Sales Cycle and Its Importance

The Sales Cycle in Dafater represents the complete journey of selling products or services to a customer — from the first price discussion to delivering the goods and collecting payment.

It is a critical business cycle because it: - Controls how revenue is generated - Ensures pricing accuracy and approval - Links sales commitments to inventory and delivery - Provides visibility into pending orders, fulfilled orders, and unpaid invoices - Helps management track sales performance and customer behavior

A well‑managed Sales Cycle ensures faster order processing, fewer errors, better customer satisfaction, and predictable cash flow.

2. Step‑by‑Step Business Process Flow

Step 1: Customer Inquiry and Pricing Discussion

A customer requests pricing for specific products or services.

The sales team: - Understands customer requirements - Confirms product availability - Applies correct pricing based on agreed price lists or negotiated rates

➡ Output: Quotation

Step 2: Issuing a Quotation

A Quotation is a formal price offer sent to the customer.

It includes: - Customer details - Item list with quantities - Prices and discounts - Taxes, delivery terms, and validity date

Business Purpose: - Sets customer expectations - Serves as a reference for negotiation - Reduces misunderstandings

Step 3: Customer Confirmation → Sales Order

Once the customer accepts the quotation, it is converted into a Sales Order.

The Sales Order: - Confirms the customer’s commitment to buy - Acts as an internal instruction to prepare goods or services - Reserves stock (if applicable)

Business Impact: - Signals demand to operations and inventory teams - Enables delivery planning - Provides visibility into future revenue

Step 4: Delivering Goods or Services

After the Sales Order is approved and ready, goods are delivered to the customer.

This is documented using a Delivery Note.

The Delivery Note: - Confirms what was actually delivered - Acts as proof of delivery - Updates inventory levels

For service businesses, this step may represent service completion rather than physical delivery.

Step 5: Billing the Customer

After delivery (or based on agreed billing terms), a Sales Invoice is created.

The Sales Invoice: - Requests payment from the customer - Records revenue for the business - Includes payment terms and due dates

This step is essential for cash flow and financial reporting.

Step 6: Payment Collection (Outside the Core Sales Cycle)

While not a sales document, payment follows the invoice and completes the revenue cycle.

3. Key Documents and Their Role

Customer

Stores customer details, credit terms, and billing preferences
Used across all sales documents

Item

Represents products or services being sold
Defines pricing, tax applicability, and stock behavior

Price List

Controls standard selling prices
Allows different pricing for retail, wholesale, or special customers

Quotation

Price offer to the customer
No financial or inventory impact

Sales Order

Customer commitment to purchase
Drives delivery and fulfillment planning

Delivery Note

Confirms delivery of goods
Reduces inventory

Sales Invoice

Legal and financial document
Records income and customer receivable

4. Business Prerequisites and Setup Requirements

Before running the Sales Cycle smoothly, the business must ensure:

Customers are properly defined with correct billing details
Items are created with accurate descriptions and pricing
Price Lists are approved and up to date
Sales terms, taxes, and delivery policies are clearly defined
Sales team understands approval and discount rules

This preparation avoids delays, disputes, and revenue leakage.

5. Common Business Scenarios and Use Cases

Scenario 1: Standard Product Sale

Quotation sent to customer
Customer confirms
Sales Order created
Goods delivered
Invoice issued

Scenario 2: Immediate Sale (Retail)

Sales Order and Delivery may be skipped
Direct Sales Invoice is issued

Scenario 3: Partial Delivery

One Sales Order
Multiple Delivery Notes
One or multiple Sales Invoices

Scenario 4: Contract or Project Sale

One Quotation
Multiple milestone-based invoices

6. Best Practices and Important Considerations

Always use Quotations for price transparency and audit trail
Avoid manual price overrides unless approved
Ensure Delivery Notes match actual delivered quantities
Invoice promptly after delivery to improve cash flow
Monitor pending Sales Orders to avoid fulfillment delays
Regularly review customer outstanding balances before confirming new orders

7. How Documents Flow Through the Sales Cycle

Customer + Item + Price List
⬇
Quotation (Price Offer)
⬇
Sales Order (Customer Commitment)
⬇
Delivery Note (Goods Delivered)
⬇
Sales Invoice (Revenue & Payment Due)

Each document builds on the previous one, ensuring traceability, control, and accuracy throughout the sales journey.

Final Business Value

The Sales Cycle in Dafater provides a structured, transparent, and controllable approach to selling. When followed correctly, it improves customer trust, operational efficiency, and financial health — making it one of the most critical cycles in any business.

This document describes the sales cycle process and the related document types.

Quotation
Sales Order
Delivery Note
Sales Invoice
Customer
- Buyer of Goods and Services.
Item
- A Product or a Service that is bought, sold or kept in stock.
Price List
- A Price List is a collection of Item Prices either Selling, Buying, or both

Process Flow

The typical flow for this cycle is:

Create Quotation for customer
Convert Quotation to Sales Order
Create Delivery Note when goods are delivered
Create Sales Invoice for delivered goods
Receive Payment Entry from customer