Shipment and closing an order: documents, inspection and hand-over

This page teaches the difference between shipping an order and closing it, and why money can still be lost after the goods are gone

A merchandiser follows an order until the tracker's last row is marked Done. This lesson is about that last row. Once the cartons leave the factory, it feels finished: the goods are gone, the ship has sailed, everyone moves on to the next order. But loading the goods is not the same as closing the order. A final inspection must pass, a set of shipping documents must match the purchase order exactly, and the buyer must confirm the goods arrived and are accepted, before the order is truly done.

Without this check, a factory can ship a good order and still lose money weeks later. A mismatched invoice can make a bank refuse payment. A missed inspection can mean the buyer finds a fault the factory never caught. Marking "Done" too early hides a problem instead of closing it. This lesson teaches the mainly-money flow that closes an order: which checks come after shipment, what documents must match, and how closing an export order compares with closing a domestic one, using Cedar & Co. as the domestic case.

What you need, and what this lesson does not cover

You need: no earlier lesson is required, though lesson 5.4 on production checkpoints and lesson 1.4 on AQL inspection give useful background.

By the end of this lesson you can:

• name the three checks that must all pass before an order is closed, not just shipped;
• list the shipping documents that must match the purchase order's quantity and price exactly;
• explain why loading the goods on the ship is a legal hand-over point, not the end of the order;
• compare how an export order closes against a bank's letter of credit with how a domestic order closes against an open account;
• mark the tracker's final stage Done only once every closing check is complete.

Not covered here: how the AQL sample size and pass/fail rule work (lesson 1.4), how a letter of credit and FOB terms are agreed in the first place (lesson 1.2), and how production is tracked day to day before shipment (lesson 5.4).

Words you will meet in this lesson

An order is closed only when inspection, documents and buyer acceptance have all passed, not when the goods leave the factory

Shipping an order and closing an order are two different events. Shipping means the goods have left the factory. Closing means three separate checks have all passed: the final inspection of the finished, packed goods; a matching set of shipping documents; and the buyer's acceptance of what arrived, or a clear dispute raised within the agreed window. Only when all three are confirmed can the order's final tracker row be marked Done. A shipped order with an unchecked document or an unconfirmed delivery is still open, even though the ship has already sailed.

The three checks stay the same; the documents, the hand-over point and the payment reconciliation all change with the order's shape

Every order closes against the same three checks, but what satisfies each check differs by order shape, market and business model. A new merchandiser who has only closed one kind of order will misread the next one.

Order A closes once inspection passes, the documents match 15,000 pieces at USD 3.20, and Northline Apparel confirms receipt

Delta Garments finishes Order A, 15,000 basic cotton T-shirts for Northline Apparel. Before the cartons are loaded, a final inspection samples the finished, packed goods and passes. Mona then prepares the packing list, the commercial invoice and the bill of lading so that all three state the same figures: 15,000 pieces at USD 3.20 FOB, matching the purchase order exactly. The cartons are loaded onto Bluewater Line's ship, and the bill of lading's date is the FOB hand-over point: from that date, ownership and risk in the goods belong to Northline Apparel, not Delta Garments. Northline Apparel's own warehouse later confirms it has received all 15,000 pieces. Only at that confirmation does Karim's team mark the tracker's final "Warehouse and distribution" row Done.

Cedar & Co. closes its own domestic orders very differently, and the contrast is worth following closely, because it is easy to assume every order closes the way Order A does. Cedar & Co. is a local brand with 12 shops, buying Make to Stock from its own forecast on a 60-day open account with Delta Garments. A Cedar & Co. order never has an FOB hand-over point or a bill of lading, because the goods never leave the country by sea; a local delivery vehicle carries them from the factory directly to Cedar & Co.'s own shops or central warehouse. There is no letter of credit to reconcile documents against either, since a bank is not involved in the payment: Cedar & Co. simply owes Delta Garments the invoice amount 60 days after delivery. Closing a Cedar & Co. order therefore means two things, not three: confirming that Cedar & Co.'s own shops actually received the goods, matched against the delivery note and the purchase order, and recording that payment is due in 60 days. There is no bank to satisfy and no sea transit to wait out, so a domestic order can often close within days of delivery, while an export order under a letter of credit cannot close until the bank itself has checked the documents.

The commercial invoice must state exactly the same 15,000 pieces and USD 48,000 that the letter of credit expects

Order A's value is fixed by its own figures: 15,000 pieces at USD 3.20 FOB. Every shipping document must repeat this same total exactly, because the bank pays against the documents, not against the goods themselves.

The packing list, the commercial invoice and the bill of lading must each show 15,000 pieces and USD 48,000. If any one of the three states a different quantity or price, even by one piece or one cent, the bank can refuse to release the USD 48,000 until the documents are corrected, whether or not the goods have already left the port.

Four steps to confirm before you mark an order's final tracker row Done

1. Confirm the final inspection passed. Check that an AQL result is on file for the finished, packed goods before shipment or local delivery.
2. Confirm the documents match. For an export order, check that the packing list, commercial invoice and bill of lading all state the same quantity and price as the purchase order. For a domestic order, check the delivery note against the purchase order instead.
3. Confirm the hand-over point is recorded. For an export order, this is the bill of lading's date. For a domestic order, this is the signed delivery note at the buyer's shop or warehouse.
4. Confirm the buyer has accepted the goods. Wait for the buyer's acknowledgement of receipt, or for the agreed claim window to pass with no dispute raised, before marking the tracker Done.

A common mistake is marking an order Done on the day it is loaded or delivered, before the documents and the buyer's acceptance are confirmed

A common mistake is to close the tracker the moment the goods leave the building, whether that is loading day on an export order or delivery day on a domestic one. Loading is the FOB legal hand-over point, and local delivery is the domestic equivalent, but neither one is the same as the order being administratively closed. A shipped order with a document mismatch, or a delivered order the shop has not yet confirmed, can still turn into a payment delay or a dispute weeks later, long after everyone assumed the order was finished.

• Loading or delivering the goods is not the same as closing the order; three checks must all pass first.
• Export orders need a packing list, commercial invoice and bill of lading that all match the purchase order exactly.
• A domestic order uses a delivery note instead of a bill of lading, because the goods never board a ship.
• A letter of credit will not pay until the documents match; open account and domestic terms have no such bank check, so their risk is late payment, not blocked payment.
• The FOB hand-over point is recorded on the bill of lading's date; the domestic hand-over point is recorded on a signed delivery note.
• Mark the tracker's final stage Done only after inspection, documents and buyer acceptance are all confirmed.

Order A's goods are loaded on the ship on the planned shipping date, and Karim asks Mona to mark the order Done that same day

Order A's goods are loaded on the ship on 2026-04-13, exactly on the planned shipping date shown on the tracker. Karim asks Mona to mark the order "Done" that same day, since the cartons have left the factory on time.

The tracker's working template records this stage as follows:

Is loading day the right moment to mark Order A's final tracker row Done? Decide before opening the answer.

Order tracker: mark the final "Warehouse and distribution" row Done only once closing is actually complete

Open the Log sheet. Find the "Warehouse and distribution" row, the final stage. Do not change its status on the day the goods are loaded or delivered.

For Order A, that means the bill of lading, documents and Northline Apparel's receipt are confirmed. For Cedar & Co., it means the delivery note and shop's receipt are confirmed; the columns stay the same.

Download the Order tracker (Excel)

Lesson 6.1: What a collection is and how it differs from a single order

You now know how one order runs from confirmation to a closed tracker row. The next course steps back to look at many orders at once: how a brand plans a whole collection, and how that plan turns into the individual purchase orders you have been tracking in this course. Back to the course map