Drop Shipment Sales Order Process

Use this workflow when your supplier sends goods directly to your customer's delivery address. NexWave links the customer Sales Order to one or more supplier Purchase Orders, then updates the sales delivery progress when the supplier confirms delivery.

Drop-shipped lines do not move through your warehouse. Do not create a Delivery Note or Purchase Receipt for those lines. Use the normal warehouse fulfilment process for any lines that you receive, pick, or despatch yourself.

Before you start

Confirm these items before you create the order:

You can create and submit Sales Orders and Purchase Orders. You also need access to the customer and supplier invoicing steps used by your organisation.
The Customer, Shipping Address, and, when required, Contact Person are ready. The shipping details must identify the place and person the supplier should deliver to.
Each drop-shipped Item has at least one valid supplier and an agreed purchase price or rate.
You know which supplier will fulfil each line. One Item can have several supplier records, but only one Default Supplier for each Company.
The sales and purchase units of measure are confirmed. The Purchase Order starts from the Sales Order line quantity and unit of measure, so review the draft carefully when the supplier sells in a different unit.
You know whether the whole order is drop shipped or only selected lines. A mixed order can contain both drop-shipped lines and lines delivered from your warehouse.

Choose the correct fulfilment path

Situation	Line setup	Delivery record
The supplier sends the Item directly to the customer	Tick Supplier delivers to Customer and select the Supplier	Mark the linked Purchase Order as Delivered
Your organisation receives or despatches the Item	Leave Supplier delivers to Customer unticked and select the Source Warehouse	Create the normal Pick List or Delivery Note
One order contains both types	Configure each Sales Order line separately	Use Purchase Order delivery for drop-shipped lines and normal warehouse delivery for the other lines

1. Configure the drop-shipped Item

Open the Item and select the Purchasing tab.

Expand Supplier Details.
Tick Delivered by Supplier (Drop Ship).
Add each approved supplier to Supplier Items. Enter the Supplier Part Number when the supplier uses a different product code.
In Item Defaults, open or add the row for the Company and set the Default Supplier.
Save the Item.

The Default Supplier fills the supplier on a new Sales Order line. Supplier Items is a reference list only. It does not filter or rank the supplier search on the Sales Order line.

Drop-shipped Item with supplier details

2. Create and review the Sales Order

Create a Sales Order using your normal sales process.

Select the Customer and Delivery Date.
In Address & Contact, select the correct Shipping Address and Contact Person. Create a new customer address only when the delivery location is not already available.
Add the Items and check Quantity, UOM, rate, tax, and delivery date.
Open each drop-shipped Item row.
In Drop Ship, confirm that Supplier delivers to Customer is ticked and that Supplier is correct.
For a mixed order, leave Supplier delivers to Customer unticked on every line that your warehouse will fulfil.
Save and submit the Sales Order after the delivery details and supplier choices are correct.

To use an alternate supplier, select it on the Sales Order Item row before submission. The supplier field can show suppliers that are not listed on the Item, so verify the selection rather than relying on the search order.

Drop Ship section on a Sales Order Item

3. Create the supplier Purchase Order

From the submitted Sales Order, select Create > Purchase Order.

The Select Items dialog shows the remaining quantity and the supplier stored on each Sales Order line.

Select the lines to order.
Choose how NexWave should group the Purchase Orders:
- Tick Against Default Supplier to use the supplier already stored on each selected Sales Order line. NexWave creates a separate draft Purchase Order for each supplier.
- Leave Against Default Supplier unticked to create one draft Purchase Order. Select only the rows for one supplier, then choose that supplier on the draft. Repeat the process for other suppliers.
Select Create Purchase Order.

You can create a Purchase Order for only part of the order. Repeat the same process later for any remaining Sales Order quantity.

Purchase Order selection dialog with the Sales Order supplier

4. Review, submit, and send the Purchase Order

Check each draft Purchase Order before submission:

Supplier is the organisation that will fulfil these lines.
The Drop Ship tab shows the correct Customer, Customer Contact, and Shipping Address copied from the Sales Order.
Required By, Quantity, UOM, rate, taxes, and supplier part numbers are correct.
The Purchase Order contains only Items that this supplier should fulfil.
A warehouse is not set for a drop-shipped line.

If the supplier uses a different purchase unit, change the draft Purchase Order to the agreed UOM and confirm the resulting quantity before submission.

Submit the Purchase Order, then send it to the supplier through your normal approved print or email process. Ask the supplier to confirm despatch and final delivery.

5. Confirm supplier delivery

When the supplier confirms that the full Purchase Order has reached the customer:

Open the submitted Purchase Order.
Select Status > Delivered.
Return to the Sales Order through Connections.
Confirm that the drop-shipped quantity is now treated as delivered.

Do not mark the Purchase Order as Delivered when the supplier has only despatched the goods or delivered part of the order. For planned partial deliveries, use separate Purchase Orders for the quantities that can be confirmed independently.

Delivered action on a drop-shipment Purchase Order

The Sales Order normally moves to To Bill after all drop-shipped lines are delivered. A mixed order can remain To Deliver and Bill until the warehouse lines are also completed.

Sales Order ready for customer billing after supplier delivery

6. Create the customer and supplier invoices

Complete both sides of the commercial transaction:

From the Sales Order, select Create > Sales Invoice. Review, submit, and send the invoice to the customer.
From the Purchase Order, select Create > Purchase Invoice when the supplier invoice arrives. Review and submit it against the same supplier order.
Record and reconcile the customer receipt and supplier payment through your normal banking process.

The customer and supplier invoices are separate documents. Marking the Purchase Order as Delivered updates delivery progress but does not create either invoice.

Review checks

Before you close the workflow, confirm:

Every drop-shipped Sales Order line has a linked Purchase Order.
Each Purchase Order contains only the Items for its selected supplier.
The Purchase Order delivery address and contact match the customer's requested destination.
Every confirmed delivery has Status set to Delivered on the relevant Purchase Order.
Warehouse-fulfilled lines have their normal Delivery Notes, while drop-shipped lines do not.
The customer Sales Invoice and supplier Purchase Invoice match the quantities and prices agreed for the same order.
The Sales Order is Completed only after the required delivery and billing steps are complete.

Corrections and returns

If a Sales Order or Purchase Order is still a draft, correct the supplier, address, quantity, or unit of measure before submission.
If a submitted Purchase Order was marked as Delivered by mistake, select Status > Re-open, then correct the process before marking it delivered again.
If submitted invoices exist, follow your organisation's cancellation, amendment, or credit-note controls before changing the source order.
For a customer return, record the customer credit or return and the related supplier return separately. Do not record an internal warehouse receipt unless the returned goods physically come into your warehouse.

Troubleshooting

Problem	Check and action
Against Default Supplier hides an Item	Open the Sales Order Item row and set Supplier. If the same supplier should fill automatically next time, set Default Supplier for the Company in Item Defaults.
The wrong supplier appears on the Sales Order	Change Supplier on the line before submission. The supplier search is not filtered by Supplier Items.
The Purchase Order contains Items for different suppliers	Return to the Sales Order and confirm each line's Supplier. Create separate Purchase Orders by supplier.
The supplier address or recipient is wrong	Correct Shipping Address and Contact Person on the Sales Order before creating the Purchase Order. Correct any existing draft Purchase Order too.
No Purchase Receipt or Delivery Note is available	This is expected for a drop-shipped line. Use Status > Delivered on the linked Purchase Order after customer delivery is confirmed.
The Sales Order still shows delivery outstanding	Check that every linked drop-shipment Purchase Order is Delivered. For a mixed order, also complete the Delivery Notes for warehouse-fulfilled lines.
The Purchase Order quantity or unit is wrong	Review the draft Purchase Order Quantity, UOM, and conversion before submission. The supplier's purchasing unit is not selected automatically from a different Sales Order unit.
A product bundle does not split into the supplier orders you expect	Review the generated Purchase Order lines before submission. When bundle components need different suppliers, use separately reviewed order lines or an approved workflow for that supplier split.
Stock appears to be reserved for a line that should be drop shipped	Open the Sales Order Item and confirm Supplier delivers to Customer is ticked. Warehouse delivery settings belong only on lines your organisation fulfils.