Learn the best practice for handling backorders in commonsku.
A backorder is an order that cannot be filled due to low inventory. Sometimes, a product is on backorder, and other times, only select product variants are on backorder.
There can be different hand-offs when processing a backorder, depending on your team's size and dynamics. The steps below describe the hand-offs for a team with designated sales, production, and invoicing reps. However, teams of any size can follow the same guidelines.
On this page:
Step 1 - Update the PO and tag accounting
Step 2 - Create a partial invoice and update the sales order's status
Step 3 - Create a second invoice once the order is complete
Step 1 - Update the PO and tag accounting
Typically, the production rep is responsible to:
- When a backorder is recognized, change the POs status to Problem or Follow Up
- Open the project and tag the order rep and invoicing rep with detailed notes on what needs to be invoiced
- Pin the note to the project's overview
- Change the sales order's status to Ready to be Invoiced
Step 2 - Create a partial invoice and update the sales order's status
Step 3 - Create a second invoice once the order is complete
From there, the production rep will:
- Update the PO's stage to Ready for Billing when the remaining products are ready (this will automatically update the sales order status to Ready to be Invoiced)
- Open the project and tag the order rep and invoicing rep to let them know the order is ready to be invoiced
Next, the accounting rep can:
Reporting
In addition to the process listed above, you can keep tabs on your backorders by:
- Using a custom Next Action Type to identify backorders POs
- Using order tags to track backorders in your Sales Rep Report
commonsku Tip - As noted in the steps above, it's crucial to tag the invoicing rep(s) when a backorder is recognized and again when the final invoice can be created. Especially because Partially invoiced orders do not reflect the remaining balance for the backorder. You will still need to create another invoice to charge the backordered item once it's ready to ship out. All invoices can be pulled in Finance > Invoicing > Invoices Report.