ERPNext tutorials
ERPNext for beginners: complete your first business workflow
Your first ERPNext workflow is one sale from start to finish. Set up a customer and an item, then create a quotation, a sales order, a delivery note, a sales invoice and a payment entry. Each record is made from the one before. Finish by checking the Accounts Receivable report. This tutorial uses a fictional company and fictional amounts.
Before you start
This tutorial is for a business user, not a developer. It does not cover installing ERPNext. You need access to an ERPNext site that already has a company, a chart of accounts and your taxes set up. If that is not done, the ERPNext documentation lists the setup order: company, chart of accounts and taxes, then items, customers and suppliers, then users, then a full test cycle.
Source: ERPNext documentation: setting up.
Al Noor Office Furniture Trading LLC is a made-up Dubai company. It sells 10 office chairs to Marina Design Studio, another made-up company. The chair price is AED 300 each, plus 5% VAT. Nothing here is a real business, quote or invoice.
If you are new to the software, read what ERPNext is first. For the invoice step in more detail, see how to create a sales invoice and record payment.
Step 1: Create the customer and the item
Every record in the chain pulls details from two master records. Create these first.
- Customer: Marina Design Studio.Create one Customer for each independently billed party. Add the billing address and the main contact as linked records. If the customer is registered for VAT, enter its Tax Registration Number in the Tax ID field.
- Item: Office chair.Create a stock item with a unit of measure. Add its price and the tax treatment so the quotation can fetch them.
Source: ERPNext documentation: Customer.
Source: ERPNext documentation: UAE and KSA VAT setup.
Checkpoint: you can find both records in their lists, and the customer has an address and a contact.
Step 2: Quote, then confirm the order
A Quotation records the items, quantities, prices, taxes and terms offered to a customer. Enter 10 office chairs at AED 300 and choose the 5% VAT tax template. Submit it, then convert it into a Sales Order once the customer accepts.
Source: ERPNext documentation: Quotation.
The Sales Order records the confirmed request: items, quantities, prices, delivery dates and terms. Submitting it confirms the commitment and makes it available for delivery and invoicing.
Source: ERPNext documentation: Sales Order.
| Line | Amount (AED) |
|---|---|
| 10 office chairs at AED 300 | 3,000 |
| VAT at 5% | 150 |
| Order total | 3,150 |
The quotation and the order should show the same totals. If they do not, check the tax template before moving on.
Step 3: Deliver the goods
A Delivery Note records the shipment from your warehouse and updates the stock. You normally create it from a submitted Sales Order by choosing Create, then Delivery. The delivery note is optional: a sales invoice can be created straight from an order, which suits services.
Source: ERPNext documentation: Delivery Note.
Checkpoint: the stock quantity for the office chair has gone down by 10, and the order shows the delivery.
Step 4: Invoice the customer
Open the submitted Delivery Note, choose Create, then Sales Invoice. When the invoice is made from a delivery note, do not turn on Update Stock, because the delivery note already moved the stock. Check the due date, the taxes and the totals, then submit.
Source: ERPNext documentation: Sales Invoice.
Submitting records what the customer owes, the income and the VAT in the accounts. Until it is submitted, the invoice is a draft and posts nothing.
Checkpoint: the invoice total is AED 3,150 and its status shows the amount as unpaid.
Step 5: Record the payment
On the submitted invoice, choose Create, then Payment. This opens a Payment Entry of the Receive type, with the customer as the party. Choose the mode of payment, enter the amount and allocate it to the invoice. Submit it.
Source: ERPNext documentation: Payment Entry.
ERPNext debits the bank or cash account, credits Accounts Receivable and reduces the invoice’s outstanding amount. A payment that you do not allocate stays as an advance that you can match later.
| Item | Amount (AED) |
|---|---|
| Invoice total | 3,150 |
| First payment received | 2,000 |
| Still outstanding | 1,150 |
Step 6: Check the result in a report
Open the Accounts Receivable report. It shows what each customer still owes and which invoices are overdue. Then open the General Ledger for the same invoice, which lists every debit and credit it created. Draft records do not appear in the ledger, so a missing entry usually means a record was not submitted.
Source: ERPNext documentation: Accounts Receivable.
Source: ERPNext documentation: General Ledger.
Illustrative checkpoint: in a test company, confirm that the receivable report reflects the invoice and payment you entered. The figures and company name in this example are fictional.
For production work, repeat this workflow in your own test company and record the ERPNext version and sample references before go-live.What to practise next
- Fix a mistake. Make a credit note for a returned chair. See the sales invoice tutorial for the correction path.
- Try a service sale. Use a non-stock item and invoice without a delivery note.
- Check UAE e-invoicing separately. Creating an invoice in ERPNext is not the same as exchanging it through an accredited provider. Read how ERPNext e-invoicing works in the UAE.
Prepared by the StarterKit team. Regulatory statements link to UAE government sources. Examples and suggested work plans are labelled separately; they do not determine your business’s legal or tax position. Check the linked decisions for the full conditions and later changes.