Set up a drop-ship workflow

Drop ship is a workflow that lets you ship orders directly from a supplier to your customer, potentially saving you inventory costs. This topic shows you how to set up this feature to work in your company.

To use the drop-ship function, your company must be subscribed to Order Entry and Purchasing.

About the drop-ship workflow

The following is an example of a drop-ship workflow. Your company might use different transaction types.

A user creates a sales order for a customer and selects the following for a line item:

• An item that's available for drop ship
• A supplier dimension
• The Drop ship checkbox

When the user posts the sales order, Intacct automatically creates one or more purchase orders for the drop-ship line items and selected vendors. In the purchaser order, Intacct uses the customer Ship to contact as the Return to name and address and populates the payment Date due field using the applicable AP term. The sales and purchasing transactions then follow the established sales and purchasing workflows, as in the following examples:

• Sales workflow: the user converts the sales order to a OE sales invoice and sends the invoice to the customer as per the established process. The customer sends payment to the user's company and the established accounts receivable process applies.
• Purchasing workflow: if there's an approval process associated with the purchase order, the applicable users approve the purchase order. The user sends the purchase order to the supplier according to their established process. The supplier ships the items directly to the customer and sends the AP supplier invoice to the user's company. When the user gets the AP supplier invoice from the supplier, the user converts the purchase order to a PO purchase invoice and the established accounts payable process applies.

Drop ship and buy to order can be used in the same sales transaction. However, for each line item only Drop ship or Buy to order can be selected. Drop-ship items are shipped directly to the customer and buy-to-order items are delivered to the user, another contact in the user's company, or to a third party for more processing before shipping to the customer.

Set up drop ship

The following sections outline the steps for setting up the drop-ship workflow.

1. Create or identify transaction definitions
2. Configure Order Entry
3. Update items
4. Update suppliers
5. Update Purchasing price lists
6. Optional customizations

1. Create or identify transaction definitions

You need at least one Order Entry and one Purchasing transaction definition to set up drop ship. In another step, you will define relationships between the transaction definitions so that the system knows which purchasing transaction should be created from which sales transaction. Keep the following requirements in mind as you identify your Order Entry and Purchasing transaction definitions for drop ship:

• You can map multiple sales transactions to the same purchasing transaction.
• You can map a sales transaction to only one purchasing transaction.
• Choose one sales transaction per workflow to be the drop-ship initiator. For example, Sales Workflow A is: Sales Order A --> OE sales invoice A. In this scenario, do not map both Sales Order A and OE sales invoice A to a purchasing transaction, because you could end up with two purchasing transactions. Only map one sales transaction in a given workflow to a purchasing transaction. Learn how to view transaction definition workflows.
• For multi-entity, shared companies: If you are setting up the transaction definition mapping relationships at the top level, you can only map transaction definitions that were created at the top level. If you are setting up mapping relationships at the entity level, you can only map transaction definitions that were created at the entity level.

Transaction Definition	Requirements
Order Entry	To avoid negative inventory, the best practice is to set the Order Entry transaction definition to not affect inventory quantity or value (the inventory totals table in the Inventory Control section of the transaction definition should be empty). Optional. Allow editing of the Ship to contact. This allows the user to select a different Ship to contact other than the default when creating the sales transaction. The system uses the Ship to contact in the sales transaction to populate the Return to contact in the purchasing transaction. Learn how to create an Order Entry transaction definition.
Purchasing	Must have a valid Numbering sequence defined in the Transaction numbering section. Must have Create policy set to New document or convert. Must have a Purchasing price list defined as the Initial price list. See Step 5. Updating the Purchasing price list. Optional. Should not have Edit policy set to No edit. If it is set to No edit, the user won't be allowed to change the purchasing transaction after it is created by the system. Optional. Set a Default AP term to use if a selected supplier does not have an AP term defined. Optional. To avoid confusion on the purchase transaction, change the Contact title from Return to to Ship to. Learn how to create a Purchasing transaction definition.

2. Configure Order Entry

You will do the following in the Configure Order Entry page:

• Enable drop ship
• Define the Order Entry transaction definition relationships to Purchasing transactions
• Enable the supplier dimension

In a multi-entity, shared environment, you enable drop ship at the top level. You can then map transaction definitions at the top level, the entity level, or both.

1. Go to Order Entry > Setup > Configuration.

2. In the Drop ship subsection of the Enable functionality section, select Enable drop ship.

   A mapping table appears.

3. In the Sales transaction definition column, use the dropdown list to select a sales transaction definition that you created or identified in 1. Create or identify transaction definitions.
4. In the Purchasing transaction definition column, use the dropdown list to select the purchase transaction that will be created from the corresponding sales transaction.
5. Leave the Active checkbox selected to activate the mapping or deselect the checkbox to make the mapping inactive. For example, you might want to leave a mapping inactive while you complete the configuration.
   If you create at least one drop-ship transaction from a mapped transaction definition, you cannot change or delete the mapped relationship. However, you can deactivate it. See Turn off drop ship for more information.
6. Repeat steps 3-5 for each desired transaction definition relationship.
7. In the Dimension setup section, select the Supplier checkbox and then select Save.
   If you do not see the supplier dimension in this section, enable the supplier dimension in the General Ledger and then try enabling the supplier dimension in Order Entry.

   To enable the supplier dimension in the General Ledger:

   1. Go to General Ledger > Setup > Configuration.

   2. In the Dimension settings section, select Enable next to Supplier and then select Save.

3. Update items

Each item that you want to drop ship needs to be updated to set the Available for drop ship option to true. After Order Entry is configured for drop ship, the Available for drop ship checkbox appears in the Item information page for items where the item type is inventory or non-inventory. The following procedure assumes that the items exist in your system. If the items do not exist, create the items before proceeding.

1. Go to Order Entry > All > Items.

2. In the Items list, find the item and select Edit next to it.
3. In the Sales section of the Item Information page, select Available for drop ship and select Save.
   The Available for drop ship checkbox only appears for Inventory or Non-inventory item types.
4. Repeat steps 2-3 for each applicable item.

4. Update AP terms for suppliers

The system uses the AP term to populate the payment Date due in the purchasing transaction, counting forward the applicable number of days from the sales Transaction date. Each supplier for whom you want to be able to create purchase transactions from a sales transaction should have a default AP term associated with it.

If the system does not find an AP term for a selected supplier, it uses the default AP term from the applicable purchasing transaction definition. If the purchasing transaction definition does not have a default AP term associated with it, the system will throw an error and the user won't be able to save the sales transaction that is initiating the purchasing transaction.

1. Go to Purchasing > All > Suppliers.

2. In the Suppliers list, find the supplier and select Edit next to it.
3. In the Supplier Information page, select the Payment information tab, use the dropdown to select the Term, and select Save. Repeat steps 2-3 for each applicable supplier.

5. Update Purchasing price lists

A drop-ship item must have a price defined in a Purchasing price list for the system to create the purchase order from the sales order with purchase prices that aren't a zero amount. The Purchasing price list must be associated with either the Purchasing drop-ship transaction definition or with the selected supplier. The best practice is to associate a default Purchasing price list with the Purchasing drop-ship transaction definition. If the system finds a price list on the selected supplier, the supplier price list takes precedence over the default price list.

1. Go to Purchasing > Setup > Price > Lists.

2. On the Purchasing price lists page select Details next to the applicable price list.

3. Select Add.

4. Use the dropdown list to select the desired Item, then complete the rest of the fields as applicable. See Price list entries for information on these fields.
5. Select Save.
6. Repeat steps 3-5 for each applicable item.

6. Optional customizations

The following optional customizations can help simplify your drop-ship workflow:

• Enable the customer dimension in Purchasing
• Customize the sales transaction form layout
• Create a document template for drop-ship purchasing transaction definitions
• Create a custom drop-ship history report

Enable the customer dimension in Purchasing

To allow for more complete reporting, Intacct recommends that you enable the customer dimension in the Purchasing application. When the system creates the purchasing transaction from the sales transaction, it populates the customer dimension on the purchasing transaction with the customer name from the sales transaction.

To enable the customer dimension in Purchasing:

Customize the sales transaction form layout

To help your users remember to add a supplier dimension to a line item that they want to drop ship, you might want to change the Entries section column layout in the applicable sales transactions so that the Supplier dimension is next to the Drop ship column as in the following example:

Learn how to move entry fields.

Create a document template for drop-ship purchasing transaction definitions

The customer Ship to address from the sales transaction appears as the Return to address in the purchasing transaction. You may want to create a document template Microsoft® Word templates used to produce printed invoices, sales orders, and purchase order documents. that includes the text "Ship to" and place it next to the customer address. You can also add boilerplate comments or special instructions to the document template. Then associate the document template with the applicable drop-ship purchasing transaction definitions.

Learn how to create document templates.

Create a custom drop-ship report

If your company is subscribed to Customization Services or Platform Services, you can use the Drop-ship History custom report object to create reports about your drop-ship transactions. You can create reports that help you identify drop-ship transactions, compare sales price to purchase price, and so on.

In the custom report writer, select the Drop-ship History object as the primary data source in Step 1. Then select the desired columns, select the column sequence, and so on.

Learn how to create custom reports.

Turn off drop ship

If you enable drop ship and use it for at least one transaction, you cannot disable it. However, you can deactivate the transaction definition mapping relationships. This removes the Drop ship field from the sales transactions so that users cannot create purchase transactions from sales transactions.

You also cannot change or delete a mapped relationship if you have created at least one drop-ship transaction from the mapped transaction definition. To change a mapped relationship, deactivate the current relationship, then add a new transaction definition relationship to the table using the applicable transaction definition.

Deactivate transaction definition mapping relationships

1. Go to Order Entry > Setup > Configuration.

2. In the Drop ship subsection of the Enable functionality section, deselect the Active checkbox in each applicable row of the drop-ship transaction definition mapping table.
3. Select Save.