Many times we encounter scenarios where we need to ship an item directly from a vendor to a customer, for example in case of High Seas Sale.

Such scenarios can be dealt with Drop Shipment method. Following is the walk through of Drop shipment in Microsoft Dynamics NAV 2016

Prerequisite: Setup Vendor, Customer, Item, Purchasing codes to enable drop shipment

Setting purchasing codes

Figure 1. Purchasing Codes

Configure Purchasing Codes and enable Drop Shipment field.

Path to configure Purchasing Codes:   Departments > Purchase > Administration > Order Processing > Setup > Purchase Codes


Second, you will need to set up you Sales Order Lines to show Purchasing Code and Drop Shipment field. If you do not see Purchasing Code and Drop Shipment field, right-click your mouse to show a list of options. Select the option to Choose Columns…


Figure 2. Show Purchasing Code and Drop Shipment fields.

The Customize Tab on  Lines window will appear, as shown. Select the “Purchasing Code” and “Drop Shipment” from the Available Columns on the left side and select the Add button.

Figure 3. Highlight the “Purchasing Code” and “Drop Shipment” and select the Add button.

Creating a drop shipment 

Figure 4. Select the purchasing code for the Drop Shipment.

Path to Create a Sales Order: Departments > Sales & Marketing > Order Processing > Sales Orders

On the sales line, in the Purchasing Code field, select a purchasing code that has a check mark in the Drop Shipment field.

Create a purchase order to order the corresponding items from your vendor: Go to File Departments > Purchase > Planning > Requisition Worksheets


 On the Actions tab, in the Functions group, choose Drop Shipment, and then choose Get Sales Orders.


Figure 5. Choose Get Sales Orders on the Actions tab.

In the Get Sales Order window, fill in the filters to find the relevant sales order.

Figure 6. Fill in the filters in the Get Sales Order window.

Select OK.

Figure 7. Check action button .

On the requisition worksheet line, in the Action Message field, NAV defaults to New. This specifies an action to take to rebalance the current demand-supply situation. The value in the field may change after you have calculated a plan and when you edit the quantity or date fields on the planning line. The following action messages exist:

  • New – Create a new order
  • Change Qty – Change the quantity on an existing order
  • Reschedule – Reschedule the due date on an existing order
  • & Chg. Qty. – Reschedule the due date and change the quantity on an existing order
  • Cancel – Cancel an existing order

You can define what is included in the batch job by placing a check mark in the Accept Action Message field for the relevant lines. You can also remove the check mark if you want to. The program includes only those lines that have accepted action messages in the batch job.


In the Req. Worksheet window, on the Actions tab, in the Functions group, choose Carry Out

Action Message.


Figure 8. Carry Out Action Message

You can also choose to print the order. Option to print the order. Select OK.

This carries out the action message that is proposed for the selected line in the Requisition Worksheet window. When the batch job is run, the program carries out the proposed action and changes the existing replenishment plan accordingly. This could result to any or combination of the following:

  • The program changes existing replenishment orders according to the action message proposal. This could change the quantity or reschedule the due date.
  • The program deletes any existing replenishment orders that carry the action message Cancel.
  • The program makes new replenishment orders from proposals that carry the action message New. Note that these orders will not be posted, and you can view them in the relevant application area. You can make changes in the orders.
  • The batch job deletes the lines in the requisition worksheet after it has performed the action message. The other lines remain in the requisition worksheet until they are either accepted at a later date or deleted. You can also delete the lines manually.

Select the Print Orders field to print the replenishment orders that are created.

Figure 9. Purchase Order relevant to sales order.

In case of item tracking is assigned on the corresponding sales order, the Get Sales Order function will copy the item tracking lines to the newly created purchase order. You can view them from the Lines Fast Tab by clicking Actions, pointing to Line, and then clicking Item Tracking Lines. You cannot invoice the purchase order before the sales order is invoiced. 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 orders.

Now the Purchase Order and the Sales Order are linked. The Purchase Order auto populates the Sell-to Customer No., Ship to Name, Address, and Shipment Method Code.

After you have released the purchase order, you must wait until the vendor informs you that the items have been shipped to the customer. You can then post the sales order and thereby post the drop shipment. When you set up the purchase order, use the function Drop Shipment, Get Sales Order to link to the relevant sales order. The sales order lines will be copied to the newly-created purchase order.

Figure 10. Use the function Drop Shipment, Get Sales Order to link to the relevant sales order.


Figure 11. Drop Shipment Sales Order.


Posting a drop shipment

In the Sales Order window, on the Actions tab, in the Posting group, choose Post, and then choose either Ship to invoice it later or Ship and Invoice to invoice it immediately. If the sales order has been invoiced, you can also invoice the purchase order. It is recommended that you print a Test Report before you post the invoice.

NOTE: When you receive the Items in on the Sales Order, the system will auto receive the Purchase Order Items. You cannot invoice the purchase order before the associated sales order has been invoiced.

Figure 12. Posting Shipment on Sales Order

Figure 13. Quantity received on Sales Order.



Figure 14. Invoice Posting on Sales Order.

Figure 15. Posted Sales Invoice.


Figure 16. Posted Shipment on Purchase Order.


Figure 17. Posting Invoice on Purchase Order.


Posting a purchase invoice

Complete the final step by posting the purchase invoice:

  • Select the Purchase Order (106024) and from the Purchase Order List, fill in all the information on the purchase invoice. Check Statistics
  • Choose Post or Post and Print.
  • Choose Invoice and then select