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Updating Status of Direct Shipments
More Information About Direct Shipments
Direct shipments are defined as orders filled by outside suppliers and shipped directly to your customer without affecting your inventory. You can also refer to direct shipments as drop shipments or brokerage sales because you are acting as a broker between your supplier and your customer.
Direct shipments are also often called special orders. However, do not confuse the two terms as they each refer to very different program functions. Special orders are defined as orders filled by outside suppliers but which pass through your inventory or possession before shipment to, or pickup by, your customer. In general, direct shipments involve larger quantities than special orders. Direct shipments do not pass through your inventory.
The customer order is entered via the Order Entry Program. When you enter a direct ship order within this program, you must begin on the Header Screen, in order to designate the order as a direct ship. On the Header Screen, enter warehouse number DIR (which identifies order as a direct shipment) and the supplier number to which the purchase order is being directed. Enter that supplier’s code in the Supp field. Each supplier is assigned a two or three character code. Usually, the Supp field contains “001” which means “stock.” enter a question mark in the Supplier Field of Order Entry to search for a supplier number. You can also look in the Item File to find the usual supplier of any item. If you enter a supplier number other than “001,” the system automatically inserts DIR in the Header Warehouse field, which identifies the order as a direct shipment.
On all detail lines, price represents the billing price to client, and cost represents the cost of purchase from supplier. Cost can be overridden, unlike the cost in a regular customer order from stock. All item numbers, whether classified as stock or non-stock, can be used for direct shipments.
Direct shipments are priced similarly to regular customer orders. However, when you establish price and promotional price files, you can designate prices as being for direct shipments only or for inventory only. The system Cost File can also contain costs that to be used for direct ship purchase orders only. Different costs can be entered in the Cost File for different suppliers. This process enables the Order Entry Program to automatically assign costs to the direct ship order based on the selected supplier.
The processed direct shipment order serves as the purchase order and the customer order. If you process it as a pick list, the pick list serves as a purchase order to your supplier. Press F4 to print the purchase order to supplier and an order acknowledgment for customer with one keystroke. Both documents contain the same order number.
The open order does not affect inventory, yet you can view it on inventory screens by entering the item numbers and warehouse DIR. The open order is accessible via Open Order Search. You can update or cancel it in the same way you do a regular stock order.
Invoice direct shipments using the regular Invoice Open Orders Program. All functions are the same except:
Costs can be overridden.
If you are working from the invoice sent to you by your supplier, enter the supplier’s invoice total as the Hash Total on the first screen of the Invoicing Program. This total is then compared to the total cost as calculated by the Invoicing Program. Any variance between the supplier’s invoice and the cost calculation is shown on the Invoicing Screen and an action must be taken. Use of the Hash Total field is optional.
The last screen of the Invoicing Program displays a warning message if total costs are not equal to the Hash Total entered on the first screen. Press F9 to bypass this warning message.
The last screen of the Invoicing Program requires entry of the supplier’s invoice number and date. Enter any relevant information if you do not have this information.
All documents such as purchase orders, order acknowledgments, or invoices include DIR SHP next to document title.
You can run open order reports and many sales analysis reports for direct shipments. By selecting warehouse DIR or transaction type D on any report parameter screen you will limit the report to include direct shipments only.
The Daily Summary Order Register and Daily Summary Invoice Register include a separate subtotal and a month-to-date subtotal for direct shipments.
Updating Status of Direct Shipments
You can update the status of a direct shipment order by using the Update Direct Ship and Special Order Status function (option 14 on the Customer Service Menu) or the Update Order Status and Shipping Dates function (option 13 on the Customer Service Menu). These programs let you update shipping and arrival dates and assign status codes to mark the order, for example, as being delayed or in transit. In the rare case that a direct shipment arrives in your warehouse (instead of your customer’s), you could enter status code R for received. Running an Open Order Report for direct ships with R status would allow the accounting department to track this temporary inventory, as it is not part of your Inventory Value Report. All open order reports have an option for selecting direct ship and special orders only. To make changes in categories such as quantity or item numbers, use the same methods and programs that you would use for changing any other type of order.
More Information About Direct Shipments
Direct shipments do not affect the costs in inventory. Instead, they carry their own individual costs. When entering direct shipments, the system uses the most applicable cost in the Cost File. If the Cost File is not used, the system uses the Item File standard base cost.
For item sales reports, direct shipments are included in total sales but not included when only stock warehouse numbers are specified. To list only direct shipment sales specify transaction type D or warehouse DIR.
To view statistics for direct shipments of an item, a product line, or a manufacturer, use options 1, 2 and 3 on the More Files Menu (option 20 on the File Maintenance Menu). Specify DIR as the warehouse. The Item Master File also shows a separate direct shipment quantity on the Inventory Statistics Screen.
To view total direct shipment sales for each supplier, run the supplier ranking reports or press F4 within any Supplier File record. You can also view direct shipment sales for suppliers in graph form using the supplier graphs option. The Cost Center File and Classification Codes File display sales breakdown by transaction types including I for inventory, D for direct shipment, and S for special order.
Your system administrator can enable or disable each user from entering direct ship orders via the first screen of settings on the User ID Control Panel (SET 2).
If you are sending purchase orders, or receiving purchase order updates and acknowledgments from suppliers, then direct ship purchase orders are automatically included along with the appropriate shipping information. All EDI processes can distinguish direct ship purchases and sales from other types of purchases and sales.
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