Sales Orders for Drop Shipments

You can sell goods that are stocked and shipped by others using a drop ship process. In Kenandy, the drop ship sales order enables you to fulfill sales orders from external suppliers who then ship the goods to your customer. After purchase agreements and relationships are established with third party suppliers, sales order lines for products with a drop ship fulfillment source can be accepted and they will trigger creation of a requisition on sales order release. A requisition is converted into a purchase order for sending to the third-party supplier. The third-party supplier ships the goods directly to the customer. In the final step, you use an ASN (advanced shipping notification) to alert the customer about the shipment, and then send the invoice. The third-party supplier sends their invoice to you (the seller).

Before you create a drop ship sales order, the customer, price book, and a product (Fulfillment Source = Drop Ship) must exist in Kenandy. You must also set up accounting rules to specify which accounts to use for the purchase order receipt and sales order shipment. For a drop ship order, you do not receive or ship the goods yourself, but you do have to generate and send the purchase order to the supplier and then invoice the customer.

Master Data for Drop Ship Sales Orders
Master Data Description
Item

A drop ship item must have a valid supplier from your supplier list.
Product Products are the individual items or services that you sell. Each product is linked to an item, and then specified on the sales order line.
Supplier Specify the details of the drop ship supplier.
Purchase Agreement

Create a purchase agreement for the supplier you plan to source the drop ship items from. Each agreement can have multiple lines, but the payment terms and conditions for all items within an agreement are the same.

Accounting Rules

Set up accounting rules for the following transaction types:

  • Logical Purchase Order Receipt
  • Logical Sales Order Shipment
ClosedCreate a Sales Order for a Drop Shipment

Sales orders are typically created by the customer service department.

  1. From the Sales Order list view page, click New.
  2. Verify the Company name. This is auto-filled based on your user preferences.
  3. Enter the Customer. For sales orders, the lookup only displays Sold-to customers.
  4. Click Save.

Kenandy displays the sales order details. You can continue to process the order by adding lines to it.

  1. From the Sales Order Detail page, click Manage Lines. Kenandy displays any existing sales order lines.
  2. Click Add New.
  3. Enter the required details for the product you want to add.

    When you add a product to a line, the line inherits the fulfillment source, if it has been specified. If the fulfillment source is not specified, or if it is set to inventory, you can change the fulfillment source to Drop Ship. Information such as the UPC Code, Pricebook, and Unit Price are also inherited from the selected product record.

  4. (Optional) Enter additional information as needed in the fields provided.
  5. Click Save & Return to save your work and return to the Sales Order Detail page.

You can release the order after it has been approved.

ClosedRelease the Sales Order

When you release the sales order, Kenandy creates a requisition for the drop ship purchase order.

  1. From the Sales Order Detail page, click Release.

    Kenandy displays a message to indicate that the sales order has been released. The requisition is listed on the Sales Order Detail page. Click Go Back to view it.

  2. From the Sales Order Detail page, scroll down to the related list of requisitions, and make a note of the Requisition ID. You will need this information to release the requisition.
ClosedGenerate a Purchase Order and create an ASN

To accommodate enterprise purchasing workflows, generating requisitions from release of sales orders is separate from generating purchase orders from requisitions. Typically the following step would be handled by someone in your purchasing department.

Convert requisitions into purchase orders to send to the supplier. Kenandy requires that a purchase agreement with the supplier exist before you can generate a purchase order.

  1. From the Requisition Release page, you can use the Requisition ID to search for the requisition. Select the requisition needed and click Generate PO. To learn more, see Requisition Release .
  2. If an agreement exists that meets the needs of all the drop ship requisition lines, then a single purchase order is created. Otherwise, multiple purchase orders are created.
  3. Add additional lines to the purchase order as needed. For example, you can add a line to cover freight charges or sample inventory. Note that if you add non-inventory lines, such as freight charges, you must go to the purchase order to close the line.
  4. Generate a PDF or an email from the PO to send to the supplier. Whatever communication channel is used, make sure that supplier receives the PO with the Customer Deliver To address and PO line details so the order can be fulfilled.

The next step in the process is to record an ASN:

 

 

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Version: Spring 2017