How do I process drop shipments from Suppliers

Q: How do we track inventory when our suppliers ship direct to our customers. We would like to enter the order from the customer and have that become the order for the supplier but our inventory is always messed up.

If you want to manage inventory, tracking stock on hand etc., you have to record the sales by item number and you have to record the receiving of those items, even if they have never physically entered your warehouse, as in the case of your supplier shipping the goods directly to your customer.

However, using Gold or Datacentre you only have to enter the details of the order once. It starts by assigning the Usual Supplier to the Item Records….

For example the Item BB100 Bronze Widget is usually purchased from Beetle Suppliers Ltd. So you can assign the Name code [BSUPP] for Beetle under the Buying Info tab [Red Arrow] in the field for “Usual Supplier for this item” [Green Arrow]. Note that you can also add the part number that Beetle uses for this item in the Supplier’s code field [Blue Arrow] e.g 123423654 so that it will appear on the Purchase Orders to Beetle if desired.

In this case I do not have any BB100 in stock…

So when customer Winter Bakery orders 10 BB100s you would enter the order as a Sales Order. Sales Order List View {Red Arrow] in the Transaction List [Green Arrow], where if you open it by double clicking the Sales Order, the 10 BB100s on Back Order are listed [Blue Arrow], click OK [Purple Arrow] to close.

With the Transaction List [Green Arrow] open and the Sales Order highlighted, go to the Command menu [Blue Arrow] and select ReorderProducts (Red Arrow}…

MW will IMMEDIATELY go to the Purchase Order list View [Red Arrow}, create a Purchase Order [Blue Arrow] and advise you that it has created 1 Purchase Order [Green Arrow}, Click OK [Brown Arrow]…

Note: if there were multiple items from multiple suppliers, multiple Purchase orders would be created, grouping the items by assigned Supplier. Or if there were multiple Sales Orders to different customers, required quantities would be ordered (one PO per supplier). Or if some items did not have an assigned Supplier code, MW would advise you that those items were not ordered. You could then go to the Item records without a Supplier code, assign the Usual Supplier and run the re-order command again and just those items would be ordered. 

Moving along with the example…

Open the Purchase Order in the List View by double clicking it and then click the Right facing arrow next to the “To” Field {Red Arrow} and

The two address fields will open [Red Arrows] where the default “Deliver To:” is your company (e.g.Acme Widgets). So, since you want Beetle to ship to your customer the Winter Bakery, check the Check Box [Blue Arrow] to advise MW that this is not a permanent change and then click the Deliver to button [Green Arrow] which opens your Names Choices list [Gold Arrow] where you can select which customer (or Names Record in reality) you want Beetle to deliver to e.g. double click the Winter Bakery [Purple Arrow] or highlight and click Use [Black Arrow].

The delivery details change to the Deliver address on file for The Winter Bakery [Red Arrow] and if you print or email the Purchase Order to Beetle on the printed or attached pdf of the Purchase Order [Blue Arrow[…
Now all you have to do is bill the customer from the Sales Order (either before or after you receive notification from Beetle that they have shipped, your choice) and receive and/or Pay for the Goods shipped by Beetle.
To bill the customer, open the Sales Order and choose Ship Goods with invoice [Blue Arrow]. Note if you have not yet received the goods from Beetle on the Purchase Order, you will have to manually enter the qty. being shipped [Red Arrow] and click OK [Green Arrow]…
The Process Order window will immediately open [Red Arrow] where you have the choice to Invoice [Green Arrow] the customer if they have terms or Create a Receipt if they have paid you [Blue Arrow] in which case you would choose the Bank Account [Purple Arrow] set the date and other options if desired and click Process button [Black Arrow].
Since in this example you have not recorded receiving the goods from the Purchase Order to Beetle, the “Out of Stock” window opens where you can Stop, Skip, Back Order or in this case, Ship Anyway, allowing negative stock {Green Arrow] Click Continue [Red Arrow].
MW IMMEDIATELY creates a Receipt for the sale to Winter Bakery, which you can see by going to the Transactions List [Green Arrow], Receipts view [Blue Arrow] where you can see and/or view the Receipt to Winter.
Your Inventory On Hand for the BB100 is now at minus 10 as you allowed the inventory to go into negative.
But once you know that Beetle has shipped the item or whenever you decide to record the goods from Beetle, you receive the goods on the Purchase Order…
Open the PO [Green Arrow] in the Purchase Order list View [Red Arrow], select Receive goods with invoice [Gold Arrow], click OK [Blue Arrow] , the Order Processing window opens [Purple Arrow], enter the invoice or a reference no. if you do not receive an invoice from Beetle [Black Arrow] set a date and click Process [Light Blue Arrow].
If you now look at your inventory records the Qty on hand for the BB100 is zero, which is correct.
There is now a Purchase Invoice for Beetle in Payables for this order, which you can pay right away or wait until you get more orders & invoices from Beetle.
So bottom line, you only have to enter the details of the 10, BB100s once in the Sales Order to Winter Bakery. After that everything was automatic and once you get used to the flow, takes less than 2 minutes.
If you require this type of answer to questions about how to use MoneyWorks, go my support services site here.

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