- How can I turn a customer sales order into a vendor order?
- What happens when I receive a vendor order with customer items on it?
- How can I get a report on my backordered items?
- How does reserve inventory work?
- How do Partial shipments work?
- How does Drop Shipping work?
APT University: Backorder Management
Preset – zero out some stock, clear vendor orders.
Hello everyone and welcome to APTU. Today we’ll be discussing backorder management and order fulfillment.
So these features are designed to allow you to effectively manage items you backordered, incoming vendor orders, vendor backorders, and allow you to set up on-demand ordering or just-in-time delivery.
So we’re going to jump straight into AdvancePro and discuss how backorders work. We’re going to place a customer order for some stock we don’t have. So here you can see our stock level is zero, and we can place this order.
During processing, by default, AdvancePro is going to create a vendor purchase order and it’s going to be linked to this customer order, now if there’s more than one line item, we can split this order up and do a partial shipment right now from our warehouse, and another shipment once we receive that vendor order.
When the vendor order is received, we return to this screen and pull from our warehouse to commit stock and start the picking process.
When we use this process order screen to pick out of the warehouse, it creates a reserve on this inventory, that means that we know the stock is still on hand, but that we haven’t shipped it yet. Manufacturing does the same thing, reserving the components until the work order is finalized. This allows us to see the total stock, and the stock that’s available for sale, so we don’t actually sell more product than we have available.
Something else I should note is that if you manufacture, you can send a back order to manufacturing to start a work order as well, and when you process that work order, you can send a backorder for the parts to the vendor, or for a sub-assembly item to another work order. See our past videos on advanceprotech.com under resources for more details on manufacturing.
So lets go ahead and create that vendor order and click process, here we get a popup to tell us the results from processing the order. It made a vendor order.
If we come to view all customer orders, we’re going to see an icon code telling us the status of the order, green meaning we have stock on hand, orange meaning we can do a partial shipment, red meaning we don’t have the stock to take any action. The hourglass meaning we’re waiting on stock from our vendor, the warehouse dolly meaning it’s being picked, and the truck meaning the order is being drop-shipped by the vendor.
When we get to the vendor order, we can see the customer order this is linked to by clicking the eye button. If we had a busy afternoon and got several orders for this vendor, they would all consolidate onto one big PO for this vendor.
Now normally when you receive these goods, they aren’t reserved for any specific customer until you go back to process those customer orders and send them to the warehouse. However, you can change a setting which will automatically reserve your customer back orders so you don’t accidentally ship those items to another customer when a customer has already been waiting.
You can activate this by going to Admin>site Settings> general settings> Customer reserved inventory.
If you place that backorder now with that setting enabled, the items will be reserved immediately when they are received, but you do need to process the customer orders out to the warehouse in order to pick and ship them.
Another useful area to visit is the backorders report. This is found on reports>product reports>back ordered items.
So now lets go ahead to receive the items into stock. Now we can touch on a vendor backorder.
If we short-receive these items, say if we ordered 10 but only got 8, AdvancePro only makes a bill for the items we actually got. The remaining items will show as partially received, and you can come back into them and receive them later, or cancel them out.
They can be on the same bill, say if you receive them a day or two apart, or if you go to vendors and view all bills, they can be on seperate bills if you click create bill on the first bill, when you receive the second shipment in that case AdvancePro will create a new bill. This is good if your deliveries are months apart and you are billed after each shipment.
So now that we’ve received our backorder, we return to view customer orders and we come to process, and we’ll look for any green or yellow order, now we can process and fill out the warehouse. Now if we ever do a partial shipment, the shipping and invoice will work similar to receiving and the bill – that is, that the items we ship will immediately create an invoice just for the shipped items. If another shipment happens, or if a drop shipment happens, it will add those items to that invoice. If you create the invoice, then every new shipment or delivery to the customer will go onto a new invoice.
So now I hope you’re beginning to see the powerful tool that’s available to you when you process this order, we can choose to do a partial shipment, or to hold stock until the entire order is ready. We have all kinds of options – this is why you see this process order screen referenced in almost every video in our APTU library – it can touch an awful lot of what AdvancePro does.
The last area I want to discuss today is drop shipping. To begin a drop shipment, check the dropshipping checkbox in the process order screen that I showed earlier. This is specifically to set up a vendor order with the customer shipping address . if you’re drop shipping to the customer of one of your own clients, come back to order details and edit the delivery address here.
So lets process this as a drop shipment, this workflow is a little different, because the stock is never going to come through your warehouse. The stock is moving directly from your vendor to your customer.
So the vendor order that gets created has your customer’s shipping address, and when we process it, it doesn’t go to the warehouse, it goes to the category here for drop shipments,
When the vendor order is confirmed, come back and fill out the received quantity and click confirm DS – this will create a vendor bill and a customer invoice all at once. And you can do a partial drop ship now, so it can work similar to the receiving and shipping where as each shipment can be confirmed as partially shipped, and the corresponding bills and invoices can be separated or merged over several shipments.
So this concludes our tour of backorder functions in AdvancePro today.