Make Drop Shipments & Special Orders in Business Central

Introduction

Companies usually sell nonstock items to customers as drop shipments or special orders. Drop shipments are sent directly from the vendor to the customer, while special orders are sent to the company’s warehouse before they are sent to the customer.
Drop shipments are used when a company wants to avoid handling an order, such as stocking and delivering, but wants to fulfill the customer’s request and include the transaction in a calculation of cost of goods sold and profit. When companies make a shipment to a customer that contains both regular and nonstock items, or want to maintain a uniform interface with customers, they might process the sales order as a special order [1].

The documentation on these processes is comprehensive and easily accessible. You can access it through the following links:

• Make Drop Shipments
• Create Special Orders

Differences between Drop Shipments and Special Orders

Although the two processes share similarities, there are a couple of noteworthy differences:

Below is a table that summarizes the differences between the two processes:

	Drop Shipments	Special Orders
Drop Shipment (field editable?)	Yes (*)	–
Special Order (field editable?)	–	No
Purchasing Code (field used?)	No (*)	Yes
Create purchase order directly	Yes	No (*)
Create purchase order using requisition worksheet	Yes	Yes

Purchasing Codes

The Purchasing Code table serves as a means to configure codes that facilitate the management of special orders, drop shipments, as well as ‘regular’ orders.

When examining the Purchasing Code table, a pertinent question arises: Why is the Drop Shipment field editable? This query has prompted me to write this article, as I aim to shed light on certain inconsistencies in the implementation of these two processes.

Note: I highlighted the inconsistencies in the table above with an asterisk (*).

My 2 cents

In Microsoft Dynamics NAV 2009 Trade manual, we can read the following:

Follow these steps to create a sales order for a nonstock item:

1. On the Sales & Marketing page, click Order Processing and then click Sales Orders.
2. Click New and then press ENTER or TAB.
3. In the Sell-to Customer No. field, enter 10000.
4. Use the Choose Columns feature to add the Purchasing Code and Nonstock fields to the line.
5. On the Lines FastTab, in the Type field, select Item.
6. On the Lines FastTab, click Actions, point to Functions, and then click Nonstock Items.
7. Select item 3100 and then click OK.
8. In the Purchasing Code field, enter DROP SHIP.

In Business Central, the utilization of the Purchasing Code field to differentiate between drop shipments and special orders remains applicable. However, it is worth noting that the current documentation lacks mention of this aspect, and the Purchasing Code field is not involved in the process of creating a drop shipment.

The reason behind Microsoft excluding this information from the documentation is unclear. Nevertheless, it would indeed be more consistent if the Purchasing Code field were employed in the creation of drop shipments, aligning it with the process of creating special orders. Furthermore, making the Drop Shipment field non-editable would contribute to enhancing this consistency.

The last point I would like to address is the ability to create a purchase order directly from the sales order. This feature is available for drop shipments, but not for special orders. I believe that this is a shortcoming that should be addressed in future releases. The ability to create a purchase order for special orders is only feasible when the Location Code is left empty, as the ship-to address defaults to the company’s address. However, this workaround is not a sustainable solution since the warehouse’s address may not always coincide with the company’s address.

Conclusion

In conclusion, I would like to emphasize that the objective of this article is not to criticize the implementation of these processes in Business Central. Rather, its purpose is to draw attention to the existing inconsistencies and encourage the community to contribute their perspectives on this matter.

A consistent implementation of these processes would greatly benefit the community by enhancing the comprehension of these workflows and simplifying the application configuration.

With that in mind, I would like to propose the following changes to be considered in future releases:

1. Include documentation regarding the utilization of the Purchasing Code field in the drop shipment process to align it with the special order process.
2. Enable the creation of purchase orders directly from special orders, ensuring it accommodates scenarios where the warehouse’s address differs from the company’s address.

	Drop Shipments	Special Orders
Drop Shipment (field editable?)	No	–
Special Order (field editable?)	–	No
Purchasing Code (field used?)	Yes	Yes
Create purchase order directly	Yes	Yes
Create purchase order using requisition worksheet	Yes	Yes

By addressing these aspects, Business Central would offer a more cohesive and user-friendly experience for managing drop shipments and special orders.

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[1] Source: MICROSOFT DYNAMICS® NAV 2009 TRADE, Chapter 3