A drop shipment is the shipment of an item or a consignment of items from one of your vendors directly to one of your customers. That means you act as man-in-the-middle. There is no warehouse action at your company. The goods are directly delivered from vendor to your customer.
Create a sales order, fill in the main header fields. Optional set fields “ship-to code” and “requested delivery date”. Then add e.g. 2 sales lines with type=Item, set the “drop shipment” flag in the sales lines. Optional set a value in the “purchasing code” field with a value, where the “drop shipment” flag is set. If you display column Reserve in the sales line, you see that the value is preset to Never, after setting “Drop Shipment” to true. That means no reservation entries will be created.
Close the sales order window, open a new purchase order, fill in the main header fields.
Goto Shipping tab, set the sales orders customer no. to field “Sell-to Customer No.”, optional also the same sales orders value for “ship-to code”.
Goto Actions meu, select “Drop Shipment“/”Get Sales Order“. select the before created sales order from the list, click OK. The sales lines are copied from the sales order to the purchase order. After that release the purchase order.
After you have released the purchase order, you must wait until the vendor informs you that the items have been shipped to the customer.
Now post the purchase order, but only receive it. At that moment it’s not possible to invoice the purchase order.
If you try to invoice the purchase order, you get an error message like …
The reason is: You want first to sell the item(s) before purchasing them. So you first have to create the sales invoice for the customer. Then you can be sure to get your money. After that you would create the purchase invoice, means that you pay your vendor at the end.
So you close the purchase order and reopen the according sales order and post it.
Now reopen the purchase order and post it.
If item tracking was assigned on the corresponding sales order, the Get Sales Order function will also copy the item tracking lines to the newly-created purchase order. You cannot post a drop shipment order that has item tracking unless item tracking is synchronized. Serial numbers and lot numbers must be the same between the two related orders.