How to recognize cost for non-inventory products purchased on drop ship PO for a Sales Order?

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4 comments

  • Rebecca Ralls

    Drop Ship POs (if they are generated from a sales order) will automatically allocate inventory once it is received. But the product has to be marked as inventory.  If the products are non-inventory, they cannot be received or allocated.  The cost of non-inventory products is recorded when the payable is posted.  

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  • Cpinto

    Thanks Rebecca,

    this works BUT does not appear to provide an expense match back to the SO/Line.

    1.  Create Sales Order with Lines that consist of non-inventory products

    • Create Drop Ship PO’s from the Sales Order
    • Create Billing from the Sales Order creates GL Transactions

    Dr A/R
    Cr Revenue

    2.  Vendor Invoice received related to Drop Ship PO

    • Create Payable from Purchase Order create GL Transactions

    Dr COGS
    Cr A/P

    It looks like there is no relationship from AP Line to PO Line to SO Line so Expense matching is an issue. Am I missing something? 

    Client is fairly strict that we don't run this through Inventory even as an in/out transaction but I'm not seeing how to successfully do this with reporting to match Revenue to COGS for the sales order and billing in the GL unless I set products to Inventory.

     

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  • Rebecca Ralls

    There isn't a direct link from Payable line to SO Line, but the payable line does have a relationship to PO line which does have a relationship to SO line - albeit in reverse.  There are automations you can create to tighten up the relationship, or if you start from the PO line, you should be able to get down to the billing line or down to the payable line with custom report types. 

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  • Cpinto

    Thank you, Rebecca.  

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