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Jess674
Level 1

Sales orders and drop shipments

Hello,

We just switched to QB Enterprise from another accounting software this month.

 

We purchase from a vendor and drop ship to customers. We enter a sales order with the customer's order (the items are set up as a service) and  then create a PO for the vendor with the drop shipment.We invoice the customer when we receive the bill from the vendor. What is the correct way to invoice the customer, make sure that the sales order is closed and the bill we received from the vendor is passed on to the customer? I want to be able to run a report to make sure the customers are being billed (it was missed in the past with the other software).

 

Thanks in advance!

7 Comments 7
tmartinkovic
Level 2

Sales orders and drop shipments

We do distribution, and have inventory, but the process we use for drop ships should be similar. We create the Sales Order, and in the Sale order line, we have a Drop Ship site, and a "Linked PO" field, (new as of late last year) where we tie the PO to the Vendor.

We too, receive an invoice from the Vendor, which we Receive into the Drop Ship Site. Then we will create an Invoice (Create invoice in the Sales Order toolbar) from the Sales Order, which "Ships" the material from the Drop Ship site and invoices the customer. The Customer pays our Invoice.

We'll pay the Vendor invoice separately, and never "pass along" the Vendor invoice to the Customer.

To see what Sales Orders are still open, you can run a report in the Sales area of Reports, "Open Sales Order Report by Customer" which will show Uninvoiced Sales Orders.

Jess674
Level 1

Sales orders and drop shipments

We just sold the manufacturing operations of the company and now are only 2 employees. The person doing  AR, receives the bill from the vendor which is the indicator that the SO can be closed. She then proceeds to invoice the customer. If she happens to miss or lose the invoice, the customer wouldn't be invoiced until someone notices the order is still open (this happened with the other accounting software) but we'd have to research to see if the order is truly open as we have many that remain open for a while.

 

Since the items are marked as billable, the balance will remain on the Unbilled Costs Report unless I go in and uncheck the billable box.

 

Sorry if I'm rambling. I'm trying to make sense of this myself and find a way to make sure the customers are being billed, and the SOs and POs are closed.

RazzieE
QuickBooks Team

Sales orders and drop shipments

Thank you for choosing QuickBooks Desktop Enterprise for your business, @Jess674. Let's work this out together so you can get the help you need.

 

Yes, you're right. The process you're currently doing is also correct. However, please know that converting Purchase Order (PO) to bill will show both the sales order and billable expense when creating the invoice.

 

Alternatively, you can also convert PO to Item Receipts once you've created an invoice, only the item receipt can be linked to the invoice.

 

On the other hand, you can run the Purchase Order by Item Detail report and customize the column filter Billing Status. Here's how:

 

  1. Go to Reports tab.
  2. Select purchases and click Purchases by Item Detail.
  3. Choose Customize Report.
  4. From the Display tab, in the Column field, enter and select Billing Status.
  5. From the Filters tab, enter Name in the search bar.
  6. Filter your customer's name in the dropdown menu.
  7. Once done, select OK.

 

From there, you will see the billed customer.

I'll leave this article for more information: Customize reports in QuickBooks Desktop.

 

You can visit this article to learn how to complete year-end tasks and prepare for the new year in QuickBooks Desktop: Year-end guide for QuickBooks Desktop.


If you have more inquiries about your QBDT or if you have topics you want to tackle, please don't hesitate to comment below. Wishing for success in business. Have a great day! 

Jess674
Level 1

Sales orders and drop shipments

I created the item receipts on the PO and invoiced the customer. Now the item receipt is showing under the customer as unbilled on the Unbilled Costs by Job report.

It looks like we'll have to pick between the Open Sales Order report or the Unbilled Costs and either mark the SO as closed or the PO. Does it make sense?

MariaSoledadG
QuickBooks Team

Sales orders and drop shipments

Can you please provide additional information or a screenshot to better understand the specific process you followed? Normally, after you invoice the customer and create an item receipt on the Purchase Order, the receipt shouldn't appear on the Unbilled Cost by Job report. Let's proceed with some troubleshooting steps to ensure the integrity of your data making sure it's accurate, complete, and consistent across database Jess674.

 

You can use the Verify and Rebuild tool your data to address common issues in your company file and rebuild tool fixes. To verify your company data:

 

  1. Go to the Window menu and select Close All.
  2. Navigate to the File menu, then choose Utilities.
  3. Select Verify Data.

 

To rebuild:

 

  1.  Navigate to the File menu, choose  Utilities, andthen select Rebuild Data.
  2. QuickBooks will prompt you to create a backup before proceeding with the rebuild. Click OK to confirm  as a backup is essential to prevent data loss.
  3. Choose a location to save your backup file, then OK. Don’t replace another backup file. Enter a new name in File name and select Save.
  4. Select OK when you get the message Rebuild has completed.
  5. Go to File, select Utilities then select Verify Data again to check for additional damage.

 

For the complete steps of the process, check out this article: Verify and Rebuild Data in QuickBooks Desktop.

 

Additionally, QuickBooks offers a range of customizable reports tailored to your specific business needs needs. Learn how to customize the data so you can personalize the report and get the right data for your business. Check this out: Customize Reports in QuickBooks Desktop.

 

If you have any other questions about processing your shipments, sales orders, and item receipts, you can always reply below so we can get back to you. The Community team is always right there to assist.

Jess674
Level 1

Sales orders and drop shipments

I pulled the SO and created the invoice from there. Then I went to the PO and created the item receipts

RazzieE
QuickBooks Team

Sales orders and drop shipments

Thank you for getting back in the thread, @Jess674. I appreciate your effort to resolve your issue. Allow me to discuss this further below.

 

Generating a Purchase Order (PO) from a Sales Order (SO) is the process for handling drop shipments in QuickBooks Desktop (QBDT). Manually close the SO, then create an item receipt and convert it to a bill by selecting the Bill Received checkbox. Afterward, create an invoice linked to the bill to ensure items do not appear on the Unbilled Cost by Job report, and not to make an invoice from the SO.

 

Since this is not the case, and you have already followed the instructions recommended by my colleague above, I highly suggest contacting our Care Support team to further assist you with this.

 

Here's how:

 

  1. Visit this website: Contact Us.
  2. Choose your product, then click Continue.
  3. Follow the instructions on-screen and provide all the necessary information to proceed.

 

Once all becomes handy, you can visit this article to customize your report in QuickBooks Desktop (QBDT): Customize reports in QuickBooks Desktop.

 

I want you to know that I'm here to support you if you have other questions about processing your shipments, sales orders, and item receipts in QBDT or any QuickBooks inquiries you may have. The Community space is here to lend you a helping hand.

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