Tuesday, September 4, 2018

Intercompany Inventory Drop Ship

You can use Automated Intercompany Management to manage intercompany inventory drop ship orders. With the intercompany inventory drop ship order, one subsidiary sells an inventory item to an external customer and a different subsidiary fulfills the order. For information about items to drop ship, see Drop Ship Items.
To manage intercompany drop ship orders, you must enable Automated Intercompany Drop Ship at Setup > Company > Setup Tasks > Enable Features > Accounting. The following features are also required to use the Intercompany Drop Ship feature:
Automated Intercompany Management Drop Shipments & Special Orders Advanced Shipping
Advanced Receiving

When you enable the Automated Intercompany Drop Ship feature, NetSuite sets the following accounting preferences at Setup > Accounting > Preferences > Accounting Preferences > Order Management > Drop Shipments. These settings are required for the intercompany drop ship workflow to properly function. You cannot change these settings.
Update Drop Ship Order Quantities Automatically Prior to Shipment ­ This preference is checked and disabled. Quantities, prices, and amounts on linked transactions for intercompany drop ship orders must match.
Drop Ship Fulfillment Quantity Validation ­ set to Do not allow unequal quantities. This preference enforces matching quantities for intercompany drop ship transactions.
Allow Both Mark Shipped Fulfillments and Receipts on a Drop Shipment Line ­ set to Do not allow. For intercompany drop ship orders, you must mark the order the sales subsidiary as shipped (dummy fulfillment).
The workflow for intercompany drop ship orders follows these steps:
Accounting General Accounting Automated Intercompany Management Managing Intercompany Inventory Transfers - Arm's Length Intercompany Inventory Drop Ship
  1. Sales subsidiary creates a sales order for an external customer specifying an intercompany vendor representing the Warehouse subsidiary.
  2. Sales subsidiary creates an intercompany purchase order for the sale with an intercompany vendor representing the Warehouse subsidiary.
  3. Warehouse subsidiary generates an intercompany sales order using the Manage Intercompany Sales Orders page at Transactions > Sales > Manage Intercompany Sales Orders.
  4. Warehouse subsidiary fulfills the order and sends the item to the external customer.
  5. Warehouse subsidiary creates an intercompany sales invoice, billing the Sales subsidiary. This intercompany sales invoice debits Intercompany A/R and credits Intercompany Revenue.
  6. Sales subsidiary marks the external sales order as shipped, creating a dummy item fulfillment and completing the order.
  7. Sales subsidiary bills the intercompany purchase order. This intercompany vendor bill debits Intercompany Dropship Expense and credits Intercompany A/P.
  8. Sales subsidiary invoices the external customer for the item shipped.
For information about the general ledger impact for the posting transactions involved in intercompany
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drop ship orders, see Intercompany Drop Ship Example.

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