As the title says I’ve trying to determine what happens when a part that is not in our item master is placed on a sales order. We will often have parts like these placed on sales orders mostly as spare parts for a customer. These are marked drop ship and shipped direct from the manufacturer to the customer. But recently a project manager placed an item on a sales order but never marked it drop ship. A PO was created and the part “received” or so we think. We know where it is physically but how do we ship it out to the customer? TFHIA
Generally speaking, these are called “On The Fly” parts.
In E10, an OTF part can placed on an order, purchased against that order, received, and then shipped via a packer. Not sure if this is true in E9.
When it was received, its cost will have hit an expense account, as opposed to inventory GL. Then when it shipped, that expense is credited(or debited - whichever is the opposite of what happened when it was received), and the offsetting GL tran will be to COS or AR accruing.
We used to have this happen to us in E9 also. So much so, I finally made a bpm that users couldn’t enter an on the fly part for BTO unless they drop shipped, because they periodically were receiving them into stock and then they were lost.
I found a note to my people warning about what happened when they did this and it states: “Line 2 is a freeform part, not in the part master, and has been processed and received as buy to other. This has made the Purchase Order release go to suspense account. This is not desirable. You probably will be able to ship it by manually entering the part number, but searching will not allow it to occur since the non-part master part will not be visible as available in the system.”
Also, I believe that Part Advisor worked for the on the fly part and would show on hand, highlighted tab screenshot. I think you can ship it if manually type in the part number and use the bin where it was received to.
First off - does E9 have BTO? Where you can actually specify BTO on the order release forn OTF parts?
And what happens in E9 if you use Customer Shipment, and enter the Order Num and Line of that “BTO” order line? Can the Packer be processed? Or does it balk at the fact that its not in inventory, and there was no job for it?
Back in V8, we used to make a job for these BTO lines on orders. The job would have just one component (the item we were buying and then reselling without a part master entry), and no ops. The item would be Purchased to that job (PUR-MTL). After it was Received, we’d complete the job. Then it could be shipped from WIP.
I don’t have access to E9 anymore, but it sure did have BTO on the order release. It looked very much the same as E10’s order release. I believe user could enter the order num / line on customer shipment… not completely positive. However, I recall they had to ship from the bin that they received that OTF part to. It was like the system couldn’t count it unless you told it exactly where it was. I recall being surprised when a non-super user showed me that they saw the part in Part Advisor, when it couldn’t be found in system. It was one of those I’ll be darned moments
I’m glad we didn’t have to deal with that in V8!.. we went from Ask ManMan to E9 back in 2009.
I’m guessing the OP’s issues are:
- The Order Release is probably marked as Make Direct, and not BTO.
- The PO line was had a Buy For type of Other, but didn’t reference the SO line. FWIW - Both expensed purchases and BTO use Buy for Other (making tran types PUR-UKN)
- The item was expensed upon receipt. The receipt of a BTO purchase actually hits inventory.
If the PO hasn’t been invoiced, the OP could:
- Un-receive it
- Edit the Order Release to make it BTO
- Re-open the PO, and edit the liine so it is BTO (buy entering the Order Num and Line). Might have to delete the PO line and re-add it as a new one.
- Receive the PO receipt
- Ship to customer via Customer Shipment Entry, referencing the Order num and line on the pack line.
Yes we can BTO non item master parts although most of the time there are flagged drop ship and there is no issue. This time we have several that were added to a live sales order and POs were cut and received as ‘other’ so, like toilet paper, the parts just disappear when received. We copy our Live database over to out Test environment monthly so I’m going to try shipping the parts in Test first. I’m fairly certain I can get them to ship, I’m concerned with getting profitability dollars in the right locations after the transactions.
Mostly this. The line is flagged BTO (not Make Direct) and the PO is linked to the line on the SO. Two main issues arise. 1. I’m pretty sure the cost of the parts went to an expense account and once shipped I fear there will be no dollars for the line on our profitability reports. 2. How does the shipping department know where that part is to load it with the other equipment. Though it shows on the Sales Order Pick List report that report doesn’t give any location information for the part. Interesting times.
This is the biggest issue with BTO. You need to manually manage the parts location. Using the “Mark For” info on the PO may help, so when it is received, it will indicate what order it is for.
As for the Accounting aspects, I’d bet that the Inv/WIP Recon report would show it as a PUR-UKN, BUT hitting Inventory GL (unless a GLC was used, or another account specified on the PO). The Packer will create an UKN-CUS part tran and use the cost from the receipt, to pass on to COS.
I think that the Part Advisor showed where the part was… if I’m not mistaken.