9.2 Fulfillment Controls
Key Takeaways
Without Advanced Shipping, fulfilling a sales order also creates the invoice or cash sale. With Advanced Shipping, item fulfillment and billing are separate steps.
Pick, Pack, and Ship requires Advanced Shipping and uses Picked, Packed, and Shipped. Picked and Packed do not post. Shipped posts inventory and cost of goods sold.
Allow Overage on Item Fulfillments lets you enter a quantity larger than the quantity remaining. It is not named Allow Overage on Item Commitments.
Invoice in Advance of Fulfillment lets you bill the full order before fulfillment is complete. Show Unfulfilled Items on Invoices only displays lines that have not yet been fulfilled.
A drop shipment sends the vendor's goods to the customer and skips your inventory. A special order buys the item for that sales order, receives it at your company, and then you fulfill it.
A sales order names what the customer should receive. Fulfillment records that some or all of those lines left your process, and the bill either asks for money or records money already taken. Help says the fulfillment steps depend on Advanced Shipping, and that order fulfillments should be entered against sales orders so status shows what is delivered and what is open. Preferences at Setup > Accounting > Accounting Preferences, on the Order Management subtab, change how large a fulfillment quantity can be and when an invoice is allowed.
Sales order, then fulfillment, then invoice
For a stocked item the path is sales order, item fulfillment, then invoice or cash sale. The sales order form, plus terms or a payment method, already chose which bill you get. This section is the path between the order and that bill.
Without Advanced Shipping, fulfill and bill are one process. Fulfilling the order creates the invoice or cash sale. Go to Transactions > Sales > Fulfill Orders, choose the customer and the location, click Fulfill, and save. The order opens as the bill. Save that bill.
What Advanced Shipping changes
Advanced Shipping separates shipping from accounting. Shipping fulfills part or all of an order when it is ready. Accounting then creates an invoice or cash sale for the shipped items and rendered services. You can track partial shipments and invoice the shipped portion, or the whole order if Invoice in Advance of Fulfillment is on. Picking tickets list the items being shipped.
Once Advanced Shipping is on, Help says it cannot be turned off until every fulfilled sales order is billed. Fulfillment roles need Item Fulfillment and Fulfill Orders. Saving the fulfillment updates inventory for the items you fulfilled. Fulfillments & Invoices on the order History subtab shows what shipped and what was billed. Billing is a second action. The path is sales order, item fulfillment, then a separate invoice or cash sale. Without the feature, fulfillment and the bill are the same save.
Pick, Pack, and Ship
Pick, Pack, and Ship tracks warehouse stages inside that fulfillment. Enable it at Setup > Company > Enable Features, on the Transactions subtab. Check Pick, Pack and Ship and Advanced Shipping, then save. The feature requires Advanced Shipping, so the bill stays separate from the pick.
Help's overview says orders are fulfilled in three stages: Fulfill Orders (pick), Mark Orders Packed, and Mark Orders Shipped. The statuses are:
- Picked means the items have been taken from inventory and are waiting to be packed. This fulfillment is non-posting.
- Packed means the items are packaged and waiting to ship. This fulfillment is non-posting.
- Shipped means those items have gone out. This fulfillment posts.
The posting status is the one that can debit cost of goods sold and credit the inventory asset account for an inventory item. Picking or packing alone does not. One sales order can be split. Help's example is an order of six items: the first fulfillment holds items 1 through 3 at Picked, and the second holds items 4 through 6 at Shipped. The order is partly picked and partly shipped at the same time.
Set Default Item Fulfillment Integration Stage at Setup > Accounting > Setup Tasks > Shipping to Picked, Packed, or Shipped. You can override it on one fulfillment. Pick from Shipping > Shipping > Fulfill Orders, then mark the order packed and shipped.
Quantity and billing preferences
Allow Overage on Item Fulfillments is on the Order Management subtab, under Fulfillment. Help says to enable it when you need to enter a quantity larger than the quantity remaining for an item on a fulfillment. Disable it to limit the fulfilled quantity to the quantity remaining. The setup steps are Setup > Accounting > Accounting Preferences, Order Management, then check Allow Overage on Item Fulfillments and save. With the box checked, the item fulfillment accepts a quantity above the quantity still open on the line.
A user who must enter a quantity higher than the quantity committed on an item fulfillment uses Allow Overage on Item Fulfillments. The preference is not named Allow Overage on Item Commitments. Allow Overage on Item Receipts and Allow Overage on Assembly Builds are different preferences. Help says that if fulfillment overage is enabled, Fulfill Based on Commitment should be Ignore Commitment or Allow Uncommitted. Otherwise commitment caps the line. Overage lifts the quantity above what remains. Those commitment settings are what let that quantity also exceed what was committed. On a released warehouse pick task, you still cannot pick more than the pick-task quantity.
Invoice in Advance of Fulfillment and Show Unfulfilled Items on Invoices do different jobs. Invoice in Advance of Fulfillment lets you bill the full order before fulfillment is complete. Help says you can create an invoice or cash sale for the entire order even if only part has shipped, which is how an order that ships in parts can be billed up front. Show Unfulfilled Items on Invoices only displays items that have not yet been fulfilled. It does not authorize billing before fulfillment, and it does not change the quantity you may fulfill.
Fulfill Based on Commitment otherwise limits the fulfillment to the commitment rule.
Drop ship compared with special order
Enable Drop Shipments and Special Orders at Setup > Company > Enable Features, on the Items & Inventory subtab. When an approved sales order contains a drop-ship or special-order item, NetSuite creates a purchase order for that item. On the sales order line, the Create PO column can be set to Drop Ship or Special Order. An item record can default to one of those methods. After the feature is on, a line is one or the other, not both.
A drop shipment sends the vendor's goods to the customer. The item is not processed in your inventory. The purchase order uses the drop-ship form, names the preferred vendor, and ships to the customer's address. The line does not commit from stock. You mark it shipped instead of picking it. Inventory impact is none unless you receive the goods. If Advanced Receiving is also on, a drop-ship item received into inventory does post and does commit, and Help warns that combining that receipt with a mark-shipped fulfillment can imbalance quantities and accounts. After the receipt, it is no longer a pure drop shipment.
A special order buys the item for that sales order instead of taking it from regular stock. The purchase order uses the preferred form, links to the sale, and ships to your company's address. The item needs a preferred vendor and a purchase price. You can fulfill a special-order inventory item only after the linked purchase order is received. Receipt increases the asset account. Fulfillment increases cost of goods sold. The line commits from that receipt, not from stock already on hand.
Both paths track sales revenue and can be inventory items or non-inventory items for resale. Drop ship sends the vendor's goods to the customer. Special order receives the item at your company, then you fulfill it. When Advanced Shipping and Advanced Receiving are both on, these orders are not billed automatically. The customer bill is still an invoice or a cash sale.
What each control changes
| Preference or feature | What it changes on the fulfillment path |
|---|---|
| Advanced Shipping | Item fulfillment, then a separate invoice or cash sale. Without it, fulfilling creates the bill. |
| Pick, Pack, and Ship | Requires Advanced Shipping. Adds Picked, Packed, and Shipped. Only Shipped posts inventory and cost of goods sold. |
| Allow Overage on Item Fulfillments | Fulfillment quantity may exceed the quantity remaining, and can exceed the committed quantity when commitment is not limiting the line. |
| Invoice in Advance of Fulfillment | Bill the entire order before fulfillment is complete, including an order that ships in parts. |
| Show Unfulfilled Items on Invoices | Shows items not yet fulfilled. It does not authorize billing before fulfillment. |
| Drop Shipments and Special Orders | Drop ship sends the vendor's goods to the customer. Special order receives the item at your company before you fulfill it. |
A warehouse user must enter an item fulfillment quantity higher than the quantity committed on the line. Which preference allows that entry?
Allow Overage on Item Fulfillments, so the fulfillment can exceed the quantity remaining, including a quantity above what was committed when commitment is not limiting the line.
Allow Overage on Item Commitments, which raises the committed quantity on the sales order before anyone opens an item fulfillment.
Show Unfulfilled Items on Invoices, which adds unshipped lines to the invoice and therefore lets the fulfillment quantity exceed the commitment.
Invoice in Advance of Fulfillment, which bills the full order early and removes the committed-quantity limit on the item fulfillment.
Pick, Pack, and Ship is enabled. An item fulfillment is saved at Picked, and it has not been marked shipped. What does that fulfillment do to the ledger?
It debits cost of goods sold and credits inventory, because every saved item fulfillment posts immediately.
It debits accounts receivable, because picking the items also creates the customer bill.
It does not post. Picked and Packed are non-posting, and inventory and cost of goods sold post when the fulfillment status is Shipped.
It credits income for the selling price, because the pick completes the sale.
A sales order line is set to Drop Ship, and the goods are not received into your inventory. What happens to those goods?
The vendor ships them to your company address, and the receipt must increase the asset account before anyone can fulfill the line.
The vendor ships them to the customer. The item is not processed in your inventory, so there is no inventory impact unless you receive the goods.
Your warehouse picks them from stock, and the item fulfillment debits cost of goods sold as soon as the line is marked picked.
No purchase order is created. The line stays on the non-posting sales order until you enter a separate special-order receipt.
Sections you finish are checked off in the contents.