How-to Guide: Drop Ship Orders in Microsoft Dynamics GP
Posted by Georgia Stewart on March 17, 2016
Microsoft Dynamics GP allows you to track drop ship purchases, where a product is shipped directly from your vendor, to your customer. With drop shipping in Dynamics GP, the sales order and purchase order are linked together, so that once the customer receives the product from the vendor, you can invoice the customer. Here is a guide for setting up and using drop ship in Dynamics GP.
Drop Ship in Dynamics GP
* Click on the screen shots for a larger image
There are some options in the Sales Order Processing Setup – Options window related to Defaults for Purchase Orders and Drop-Ship Sales Items. These are pre-defined when you set up the Sales Order Processing module but you can make changes to the default setup options as needed.
The drop ship process usually starts when you enter a Sales Order in Sales Transaction Entry. Be sure to mark the D checkbox to indicate the item is being drop-shipped.
Tab off each line that is entered so that GP fully recognizes you’ve entered the line item, and then click the Actions > Purchase in the Action Pane or Menu Bar on the window. If you see one or more icons in the left that are red circles with X’s, it means that there is set up missing and GP can’t automatically create the PO. So then you need to click each Tab in the Purchase Orders Preview window and complete the missing information so that the PO can be generated.
NO Vendor means you need to click the PO tab and select a vendor for the PO.
After you select a Vendor ID, you’ll notice that there is no longer a red circle related to the vendor or the Drop PO-1, but there is a red circle next to the Item Code. Click the Item tab and enter a Vendor Item code.
After you enter the Vendor Item, you will receive a message indicating that you need to assign the vendor item to the item. Click Yes.
The Item Vendors Maintenance window will open. Enter any additional information if needed. Click Save and then close the window.
Back on the Purchase Orders Preview window, tab off the Vendor Item field. This will complete the entries needed to generate the purchase order and all of the red circles should be cleared. Click the top check box, which will mark all of the boxes to indicate that you want to create the drop-ship PO for all items listed. Then click the Generate button to generate the PO.
The Purchase Order Generation Register will print showing the PO number that was generated.
You can go to Purchase Order Entry and select the newly generated purchase order and print it (or email) and send to the vendor. There are fields on the window to indicate that the purchase order is a drop-ship.
1. The Type will be Drop-Ship
2. The Allow Document Commitments box will be marked
3. Each line item on the PO will have a small icon next to the Quantity Ordered to show that it is linked to a sales order.
Use Drop Ship Starting from the PO Entry Screen
You can also start from the Purchase Order Entry window and link Purchase Orders to Sales Orders, using the same features that are described above.
1. Make sure the Purchase Order is a Drop-Ship type
2. Mark the Allow Document Commitments box
3. Enter the line item(s) and click the link icon in the column header next to Quantity Ordered. This will open the Commitments for Purchase Order window where you can Add (or Delete) sales orders related to the line item. You can link sales orders or back orders to existing New, Released or Change Order purchase orders. In order to link a sales document and a purchase order, the purchase order must allow document commitments, and line items must meet the following requirements:
- The purchase order line item must have an uncommitted quantity
- The item numbers must match
- The site IDs must match, if you selected the option Use a Single Site for All POs in the Sales Order Processing Setup Options window
- For non-inventoried line items, the item numbers and units of measure must match
- For drop-ship line items, the customer IDs, shipping method, and ship to addresses must match
4. If you need to change or delete an item on a sales order that is linked to a PO, you need to delete the sales order from the PO in this window first so that it removes the link. Then you can make changes to both the PO and Sales Order for the line item.
When you are notified by the vendor that the order has been shipped to your customer, usually this is in the form of an invoice from the vendor. In GP you must use the Enter/Match Invoice process to record the information. You are not able to use the Receivings Transaction Entry window on drop ship items.
When you post the Purchasing Invoice, it releases the Sales Order document so that you can transfer the sales order to an invoice.
Need help using drop ship in your Dynamics GP system? Contact Georgia and our Support Team at Support@Crestwood.com.