How to Process Drop Ship Sales in Sage 100

The following process is followed in Sage 100 for entering drop ship items on sales orders, placing purchase orders for the drop shipments, and invoicing the sale and purchase. This process bypasses the Inventory Management module and neither increases nor decreases the inventory items’ quantities or General Ledger postings.

Processing Drop Shipments

choosing the correct options

The first step is to ensure that the correct settings are chosen for generating purchase orders from sales orders.

1.  Open Purchase Order > Settings > Purchase Order Options. 
2.  Click the Generate tab. 
3. Fill out all below options per your preferences:
4.  Click the Line Entry tab and change the below highlighted setting to Yes: 
   

entering the sales order drop ship lines

1.  In Sales Order Entry on the line-item to be drop shipped, check the “Drop Ship” box. 
   
   

   Drop-ship and non-drop-ship items can be combined on the same sales order.

   The sales order can be invoiced at any time after the PO has been entered. 

entering the purchase order(s)

OPTION 1 - Generate From Sales Order Entry Totals Tab

• This option is only available is you checked the “Enable Purchase Order Generation During Sales Order Entry” box in the Generate tab of the Purchase Order Options task. 
• This option is for generating one PO for one sales order
  
  
  

1.  In the Sales Order Entry Totals tab, click the Generate PO icon. 
   
   
2.  Answer Yes to save changes. 
3.  The Next Automatic PO Number screen will appear; you can change this number or leave as is. Click OK when finished. 
   
4.  If you checked the “Access Purchase Order Entry After Generation” box in Purchase Order Options, the Purchase Order Entry task will launch, and the newly created PO will display. 
   •  The Order Type is Drop Ship and the From Sales Order Number field appears with the sales order number populated. 
     
     
   •  Other header fields such as Required Date, Ship Via, FOB, etc. will populate based on the options chosen in the Generate tab in Purchase Order Options. 
     
     
   •  In the Address tab, the customer ship-to address from the sales order is populated instead of the default PO ship-to address. 
     
     
   •  In the Lines tab, the sales order’s drop ship lines will appear. 
     
     
5. If you did not check the “Access Purchase Order Entry After Generation” box in Purchase Order Options, the new PO number will display; click OK, then manually access the PO in Purchase Order Entry if needed.

OPTION 2 - Generate PO in Purchase Order Entry 

• This option is available whether or not you checked the “Enable Purchase Order Generation During Sales Order Entry” box in the Generate tab of the Purchase Order Options task. 

• This option is for generating one PO for one sales order
  
  

1.  Click Accept or Quick Print the sales order. 
2.  Open Purchase Order Entry. 
3.  Click the green arrow to create a new PO number. 
4.  Change the Purchase Order Type to Drop Ship. 
5.  In the “From Sales Order Number” field, enter or browse and choose the sales order number. 
   
   • Header: Order Type, From Sales Order No.
   • Header: other fields populated as defined in Purchase Order Options
   • Address: customer’s ship-to address from the sales order
   • Lines: the sales order drop-ship lines

OPTION 3- Auto Generate POs From Sales Orders

• This option is available whether or not you checked the “Enable Purchase Order Generation During Sales Order Entry” box in the Generate tab of the Purchase Order Options task. 
• This option is more suited for generating multiple POs for multiple sales orders, although it can be limited to just one sales order.
  
  

1.  Open Purchase Order > Main > Auto Generate From Sales Orders. 
2.  The following screen appears; you can edit any of the settings before generating the POs: 
   
   
3.  When ready, click Proceed. 
4.  Click the Printer icon. 
   •  Click Print or Preview. 
     
     
   •  Review the below listing. 
     
     
   •  Based on your review of the above list, answer Yes to proceed with generation of the POs or choose No or Clear. 
     
     
5. The POs can be edited or deleted in Purchase Order Entry and can be printed in Purchase Order Entry or Purchase Order Printing.
   

Receiving the drop ship PO

1.  Open Purchase Order > Main > Receipt of Invoice Entry 
2.  Process and update the receipt of invoice as you would for any standard PO. 
   •  This can be done before or after the sales order is invoiced.
   •  No receipt of goods is required (or possible). 
   •  The PO status will automatically change to Completed after the invoice is posted.
   • The stock does not enter your Sage 100 inventory.
   • The Inventory account is not affected, and COGS account only if this option was chosen in Purchase Order Options. 

For additional assistance in processing your drop shipments in Sage 100, contact RKL eSolutions.

Want More Sage 100 Tips & Tricks?

Make sure to subscribe to our blog to stay up-to-date on the latest insights and trends. We're dedicated to providing valuable resources for businesses looking to optimize their financial management with Sage 100.

Check out these blogs to help get you started!

How to Reverse a Cash Receipt
How to Reverse an Invoice Posted to the Wrong Month
Understanding the Purchases Clearing Report
How to Setup ACH Processing in Accounts Payable