Understanding Drop Shipping

aACE supports drop shipping (sometimes called "non-receiving purchase orders"). This method involves sending a purchase order to a vendor, including shipping information for the customer. The vendor then ships the item directly to the customer. In effect, your organization handles the purchase for the customer.

You can mark individual items on a sales order for drop shipping while the order is in Pending status. (Note: If you need to set drop shipping for an item on an open order, you must first void the initial item, then add a new line item, and mark the DS flag.)

When you mark the DS flag, it disables the aACE inventory integration for that item. In other words, aACE treats the item as non-inventoried. For drop shipped items, opening the purchase record is the “shipping” event that triggers aACE’s other automated processes (e.g. generating invoices to the customer). 

On the order, click Management tab > Shipping tab. The Non-Receiving POs section shows the auto-generated record for the drop shipped items.

At a drop shipped item’s PO, you can review the destinations. (Navigate to Accts Payable > Purchase Orders > use Quick Search to locate the desired PO.) The PO will be sent to the vendor and the item will be shipped to the customer:

Additional Preferences for Drop Shipping

System administrators can customize the drop shipping workflow with other settings:

  • System Admin > Preferences >
    • Billing > Auto-generate invoices for drop shipment purchases - When the vendor invoice is processed, invoices for the drop shipped products are created automatically.
    • Shipping > Manage receiving for drop shipments - Activates the receiving functionality even though items are marked for drop shipping. This allows you to create shipment records to capture additional information. This option is useful when the actual product is drop shipped, but there are additional details that need to be managed (e.g. special containers, insurance papers, serial numbers, paying shipping costs for a client, etc). Inventory processes are still excluded for the drop shipped item.
    • Shipping > Drop ship products to customers by default - Flags the Drop Ship (DS) checkbox automatically for all order items. The flag can be cleared manually, as needed.
  • CRM & Sales > Companies > company details view > Vendor Details tab
    • Only allow drop shipments - Requires drop shipping on order items handled by this vendor.
    • Do not allow drop shipments - Prevents any drop shipping from this vendor. After this flag is marked, aACE displays a notification when users try to mark the vendor's products for drop shipping.