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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Drop-Ship purchase orders
Microsoft Dynamics GP (Archived)

Drop-Ship purchase orders

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Posted on by Ignacio González 705

Hello,

 Has anyone worked before with Drop-Ship purchase orders?

I would like to know how GP handles this type of PO (It is one of the PO types in the Purchase Order Entry Window)

We need to buy stuff from our vendors that is directly sent to our customer, so, I would like to know what is the scope of the Drop-Ship PO in GP. What is requiered to do after createring this type of PO in GP? Can anyone describe the whole process for this type of PO?

I would appreciate any comments and expericience on this specific type of PO.

Thanks!

Ignacio

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  • Ignacio González Profile Picture
    Ignacio González 705 on at
    Re: Re: Re: Re: Re: Re: Re: Drop-Ship purchase orders

    Hello Ron,

    Thanks a lot for your reply. I think we are going to go ahead with the customization since we have a lot of this type of PO every month.

    Have a great day!

    Ignacio

  • Ron Wilson Profile Picture
    Ron Wilson 6,010 on at
    Re: Re: Re: Re: Re: Re: Drop-Ship purchase orders

    Ignacio,

    As far as the GL side goes, I will have to let Mariano answer that.  As far as "coding" what stage of the process the purchase order is in, you cannot change the GP "status" information.  You would need to figure out a way to mark that purchase order in one of the 4 stages you have listed above.  How many of these purchase orders are you dealing with a month?  If it is not a ton, then maybe you could just keep that info in an Excel spreadsheet.  There are always customizations that can be done in GP to facilitate your needs.  I will turn that over to Mariano as well. 

    I definately understand you need to know the status of the purchase order.  I am not sure how to best go about it.  If it is a small amount of purchase orders a month, the Excel route might work.  If not, then a customization may be needed.

    Ron

  • Ignacio González Profile Picture
    Ignacio González 705 on at
    Re: Re: Re: Re: Re: Drop-Ship purchase orders

    Hello Mariano,

    This is what happens in our case:

    1. The customer contacts us asking for a product.

    2. We contact the vendor and the vender gives us prices and conditions

    3. We agree with the vendor in a % of commision on that sale in particular

    4. We send the customer the prices and conditions given by our vendor

    5. If the customer agrees then we make the dropship PO to our vendor

    6. The vendor sends the items directly to the customer

    7. From that moment, we remind the customer to pay for the items and the customer has to pay in the vendor's bank accounts (we just do the follow up and we make sure our customer pays our vendor for the goods)

    8. Once our vendor has the money in its accounts then our vendor pays us the commision we agreed on.

    9. At this moment we change the status of the PO to completed and the process ends.

    What we need to control in GP is:

    1. All the "Open" dropship PO (waiting for the costumer to get the items)

    2. All the "To be paid by the customer" dropship PO (the customer got the items from the vendor)

    3. All the "Paid by the customer"  dropship PO (we need to ask the vendor for the commision on all this orders)

    4. All the "Completed" dropship PO (that means we got our commision on these orders)

    We don´t really need to update the General Ledger for these type of PO but I guess that is not possible since GP is fully integrated with GL (and we definitly need to update GL with standard PO).

    Thanks again in advance for your help!

     Ignacio

  • Ignacio González Profile Picture
    Ignacio González 705 on at
    Re: Re: Re: Drop-Ship purchase orders

    Hello Ron,

    Thank you so much for your answer and the excellent example you gave us. We set up a meeting with users and talked about the dropship process using your answer as our guideline.

    We only have a difference in our process from what your company does: we do not collect the money from the customer. Our vendor does. So, we wonder if we could just stop the process when you say: "Accounts Payable "Enter/Matches" the vendor invoice to the dropship purchase order".

    For us, our dropship process ends just there (when we receive the invoice from the vendor and we do the matching with the PO)

    I am not sure if we can just stop the process there or we have to do something else to complete the cycle. Any comments would be greatly appreciated,

    Ignacio.

  • Ignacio González Profile Picture
    Ignacio González 705 on at
    Re: Re: Drop-Ship purchase orders

    Hello Mariano,

    Thank you so much for your answer.

    That is exactly what we need: purchase orders that do not pass through our inventory.

    Could you please  tell me more about the general ledger and this type of order? What is posted in the General Ledgar? Just the Payable accounts?

    In our case we do not bill the customer in any way. We just place the PO to the vender and the vendor directly sends the goods to the customer and the customer pays the vender directly.

     I appreciate your comments

    Ignacio. 

  • Ron Wilson Profile Picture
    Ron Wilson 6,010 on at
    Re: Re: Drop-Ship purchase orders

    To expand on what Mariano has already stated with a real world example...

    We dropship 50% of our orders to our customers (if I could make it so it would be 100%).  Our standard workflow is to

    1. Enter the sales order in GP (well we actually do not use GP for our sales order entry process but we used to) 
    2. Click the dropship box for the line items that we want to dropship
    3. Click the purchase button that has shown up on the sales order after you save it
    4. From the purchasing window we verify vendor, items, qtys, ship method, and ship to
    5. We create the purchase order
    6. We print the purchase order and fax it to the vendor
    7. We call the vendor by the end of the day to confirm they received the purchase order and get an estimated ship date
    8. After confirmation, we make the assumption that the vendor will get the order sent to the customer in the time frame they gave us
    9. Accounts Payable receives the vendor invoice several days later (once the product has been shipped)
    10. Accounts Payable "Enter/Matches" the vendor invoice to the dropship purchase order
    11. Accounts Payable then sends the invoice to Account Receivable
    12. Accounts Receivable adds the freight to the sales order that the dropship was for (linked to using SOP to POP link)
    13. Accounts Receivable generates an invoice to the customer

    This is the workflow that we have found to work best for us.  We run a very lean company with inventory overhead and personnel.  This workflow may or may not work for you but hopefully it will give you a real world example of how someone else does it.

    As Mariano stated above, the inventory never comes into our warehouse, therefore it is never "received".  The enter match process does the "receiving", if you will, and then enters the vendor invoice and matches it to the dropship purchase order.

    I hope this helps.

    Ron

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