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I thought I'd jot down some very basic high level notes here on how the overall drop shipment process works in Acumatica. I'm mainly doing this because I find the drop shipment process to be a little funny in Acumatica.
First, you have to mark the Sales Order Line for drop shipment by going to the Sales Orders (SO301000) screen, then going to the Document Details area, then checking the Mark for PO checkbox and selecting the Drop-Ship value in the PO Source field. This is what "flags" the line to be drop shipped. Funny thing here, you get an error unless you populate the Warehouse? Why do you need a Warehouse on a drop shipment? I'm not sure.
Next, go to the Create Purchase Orders (PO505000) screen, check off the line you need to order from your vendor, and click the PROCESS button. The purchase order that gets generated will have a Type of Drop Ship.
Once you receive confirmation from the Vendor that they have shipped the goods to the Customer, you can go to the Purchase Orders (PO301000) screen and choose ACTIONS -> Enter PO Receipt to create the Purchase Receipt against the Purchase Order. Releasing the Purchase Receipt will not generate an inventory transaction because this is a drop shipment. Also, this Purchase Receipt document will now appear under the Shipments tab of the Sales Orders (SO301000) screen.
Let's say you then enter the AP Bill from the Vendor. Do this like normal. One way is to use ACTIONS -> Enter AP Bill on the Purchase Receipts (PO302000) screen. When you release this AP Bill, you should get your first journal entry which should look something like this:
Debit Accrued Purchases
Credit Accounts Payable
Now you need to invoice the Customer. You can do this on the Sales Orders (SO301000) screen by selecting ACTIONS -> Prepare Invoice. When you release the Invoice, it should generate the second journal entry which should look something like this:
Debit Accounts Receivable
Credit Revenue
All is good right? Wait, how are we going to relieve the Accrued Purchases account? Ah, here is where another weird thing happened. When you released the Invoice in the previous step, it also created an inventory Issue document that has its own journal entry associated with it. If you go back to the Sales Orders (SO301000) screen and go to the Shipments tab, you should see a document in the Inventory Ref. Nbr. column. Open that document, then open the journal entry associated with it and you should see something like this:
Credit Accrued Purchases
Debit Cost of Goods Sold
We have a client who is using project and wants to use drop ship functionality to have material sent to job site but there will be no related sales order. Invoicing will happen through project billing. As you pointed out above, by default the related AP bill (after receiving the drop ship) defaults to Purchase Accruals account and can't be changed (or so it appears). In our case this will never get offset. Instead we want this AP bill to hit and expense/cost of sales account and flow over to the project as such. Unless someone has a better approach this is what I did to handle this.
Drop ship POs get entered to a virtual warehouse named "DROP". Since drop ship type we can still select the project even though there is no location for this project in the "DROP" warehouse. On the posting class for this item, we have the accrual account coming from the warehouse. On the warehouse setup I pointed accrual to the main cost of sales account they want to use. When we create the AP bill, instead of the accruals account defaulting in, the cost of sales does, which is the proper expense we want to flow to the project for eventual billing.
If anyone has a better approach let me know.
Very clever Kevin. This is interesting.
Some questions:
1. When you say "no related sales order" did you actually mean "no related so invoice" or do you have some way to do drop shipments without a Sales Order document?
2. Assuming you mean "no related so invoice", do you know of a way to prevent an SO Invoice from accidentally getting created from the Sales Order? I think it's possible to stop invoicing on a Sales Order by playing with the TEMPLATE SETTINGS tab on the Order Types (SO201000) screen, but I haven't tried it myself.
Hi Tim,
No - I meant no sales order at all. Our client doesn't use sales order but uses project. They were hoping to 'drop ship' larger items they purchase directly to the job site. I was just trying to get drop ship to work with PO's. As I worked more through drop ship it is obvious it really wants to work in tandem with sales order as you explained above. The default accounting handling relating to drop ships make that obvious. My workaround to handle the accounting/GL side appeared to accomplish what the client wanted. However, for other other reasons we will likely not use drop ship PO's. Instead we will just have the PO shipped wherever but go through the normal receipt process and issue to the project as they will for most stock items. But at least trying to figure out how to make drop ship work helped me learn a little more of the inner-workings of Acumatica. A lot more to learn though.....way different than any other ERP system I've supported in my career. But I like what I see so far....
I've been finding more and more that a Sales Order can do a good job of acting as a master materials list for a project. It helps to keep track of what materials are needed and what materials have already been issued. You just "ship" them to the Project.
You can use one Sales Order per project and make the Sales Order number match the Project number manually.
You can even setup a separate Order Type that doesn't allow invoicing on the Sales Order to ensure that all billing goes through the Project.
This should also allows you to do Drop Shipments.
Funny you should say this because we have started to use Sales Orders more for certain types of projects that use inventory from existing on hand stock (and are typically smaller projects). however, for other types of projects where they need to buy in specifically for the project and make sure that inventory is allocated to the project by receiving into a "project" location AND they want to expense right away to the project it gets a little messier - at least with how we have approached this so far. However, with sales orders with could manage allocations a different way that in the end might give us better overall visibility. We've been pondering whether Sales Orders may be a better approach. Good to hear your thoughts and findings.
Thanks!
Ya, I still don't have a solution for that auto-issue PO to Project scenario for Stock Items.
I don't want to have to setup two part numbers for everything (a Non-Stock Item and a Stock Item) and rely on the user to pick the right one.
This is a good opportunity for a customization, but there are details that need to be worked through.
Tim, We have another issue. We have a client that have been doing drop ships, Mark PO, Drop Ship for Source, all is fine. Now we are integrating EDI and require a tracking number, but in the drop shipment workflow, there is no "real" shipment, hence there is no way that I see to select the Package Tab in shipments to enter the tracking numbers. Have you run into this problem or is there something I'm missing?
Make sure to vote on this at https://feedback.acumatica.com/ideas/ACU-I-2329
I managed this for a client by adding a custom field in purchase receipts. Since the receipt is referenced on the sales order as the auto generated shipment, we were able to grab this info and display it in a GI and add it to the invoice printed form. A few reasons this worked well for us was because these were single shipments per drop ship, so we didn't need/have multiple packages or need the same level of detail the packages on the sales order shipments allows. We also didn't have a requirement to make the tracking details available in the sales order screen, although some rather simple programming could pass it with the release of the receipt.
For the auto-issue PO to Project scenario for Stock Items, we ended up doing the following for a client:
1. Setup an Order Type called PR on Order Types (SO201000) screen for Projects. Set TEMPLATE SETTINGS -> AR Document Type to No Update so it won't require invoicing.
2. Created a separate Warehouse called JOB. When they put JOB on a Sales Order Line, that indicates that it should ship directly to the Project.
3. Added the Projects as Locations in the JOB Warehouse and linked those Locations to the related Projects using the Project field on the LOCATION TABLE tab of the Warehouses (IN204000) screen.
4. They check Mark for PO with PO Source of Purchase to Order (no drop shipment), then use the Create Purchase Orders (PO505000) screen to create the PO.
5. Put in some logic on the Purchase Order report to print the Project address when the Warehouse is JOB.
6. Added three schedules that all filter to only run on the JOB Warehouse:
i. Process Orders (SO501000) -> Action: Create Shipment
ii. Process Shipments (SO503000) -> Action: Confirm Shipment
iii. Process Shipments (SO503000) -> Action: Update IN
Essentially this acts like a Drop Shipment without having to do customer invoicing. It's just a way to get Stock Items to land on the Project as costs.