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Inventory

Special Orders vs. Drop Shipments: Understanding the Difference
17
Aug

Special Orders vs. Drop Shipments: Understanding the Difference 

To increase the range of their products without having money locked away in inventory, companies often turn to such procurement approaches as Special Order and Drop Shipment. Since both imply selling the item that you do not possess now of selling, the terms are often confused with one another. Nevertheless, in the sphere of logistics and ERP systems like Business Central, they are distinct operations that must be performed in different cases. Below is the explanation of the difference between these procurement approaches.  Special Order  The special order refers to the customer who wants to buy an item not in your normal inventory. You purchase the item from your vendor. Although it will be done especially for this customer because the inventory will come to your warehouse or facility first.  After the inventory reaches your dock. You receive the item, inspect it if needed, and ship the Sales Order of the customer using your inventory yourself. You own the inventory for some time.  Drop Shipment  In a similar way, the drop shipment refers to selling the item out of stock to a customer. You will buy the item from the vendor as well. The only difference is that the inventory won’t reach your warehouse.  You will make the sales order and purchase order, but you ask the vendor to send the product to your customer’s shipping address. You play the role of an intermediary in this transaction.  Core Differences  Although the customer receives the product in both cases, the backend process differs significantly in the following ways:  1. Physical handling and quality control.  When you place a special order, you get involved in the physical handling of the product. That allows you to do quality control check. Also, to make sure the product does not damage during shipping and that complete order fulfils correctly before the delivery to the customer. In case of drop shipment, you lose the control, the vendor ships the product flawlessly or not.  2. The unboxing experience.  If your business builds around the unique unboxing experience for your customers (special boxes, tissue paper, personal note), then the special order is mandatory. Drop shipment means that you receive the product in the packaging of the vendor and even may include the vendor’s shipping slips and logo.  3. Shipping Fees and Time  Drop ships tend to be quicker since the product takes the direct path from the vendor to the customer instead of making a stop at your facility first. In addition, there is no “double freight”. No paying to ship the item to you and paying again to ship it to the customer.  4. Accounting and Inventory  In an ERP environment, a special order will affect your inventory accounting temporarily and needs to be received. A drop ship order does not affect your inventory; the purchase price goes directly to COGS on receipt of the invoice from the vendor.  How Do You Decide?  Utilize Special Order procedures when the item is of high value, if it requires quality inspection, it requires shipping with other items already in your inventory, or it is of importance from the branding perspective.  Utilize drop shipments when the item is bulky or heavy (e.g. patio furniture, industrial machinery), when you need the product immediately, or when you absolutely want to avoid any warehousing cost whatsoever.  By understanding these different workflows and incorporating them into your business operation in the proper way via your ERP system, you can safely increasing your inventory. 
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04
May

Top 10 Signs Your Business Has Outgrown Spreadsheets 

No one is denying the fact that Microsoft Excel and Google Sheets have made the life of start-ups much easier. However, when the company is growing up, these applications become increasingly difficult to manage. Spreadsheets can take care of the inventory, payrolls, lead management, and a lot more. Yet, like how training wheels prevent further development in cycling, spreadsheet use becomes an obstacle at some point.  The companies experience the moment when “making do” with the spreadsheets starts doing them more harm than good. If you experience the pain of manual data entry and dread the month-end reports, then it might be high time for you to consider the alternative. Here are the 10 signs that indicate your business needs to grow beyond spreadsheet use.  1. Managing Versions Is a Headache  If your filenames resemble Q3_Report_Final_FINAL_v2.xlsx, then you need to consider other options. It is hard to keep track of all these versions of your document when many departments are working on their own copies of the same spreadsheet.  2. No “Single Source of Truth”  When the sales team needs statistics from marketing, and finance provides another set of numbers to operations, trust goes out the window. With spreadsheets, there is a tendency to develop information silos, and important data remains on employees’ computers instead of being stored in a single database.  3. Your Data Is Vulnerable  It is not easy to secure your spreadsheet. Although you can encrypt your document with a password, it is impossible to control who views each row or column. If an employee leaves your company, your confidential documents will end up in the wrong hands.  4. It Crashes or Slow down  As you keep adding hundreds or even thousands of rows, complicated formulae, and macros, your software starts to slow down considerably. What used to be a calculation that takes minutes to load may now take hours, and the software tends to freeze frequently. Your teams will spend more time looking at the loading bar than they would on analysing the data.  5. Human Error Has Become Expensive  The fact that spreadsheets are manual makes them highly susceptible to human errors. One misplaced decimal point and all your financial statements can go for a toss. Automated software does have validations to check for such problems beforehand.  6. No Access to Real-Time Data  To run an efficient business, real-time data is necessary. Spreadsheets cannot offer real-time data, as it only tells you about past data, data from the previous day or week, etc. If you do not know your status, you may end up making bad decisions.  7. The Challenge of Working Remotely  In this age of hybrid working, teams need to gain access to data anywhere. Even though cloud-based spreadsheets exist, they do not have the capability to handle multi-user editing. If your remote team cannot get access to a file because someone else is already “editing” it, then your process fails.  8. You’re Wasting Time with Data Entry Tasks  Are you or some of your highly paid managers copying data from one sheet to another to complete their work? Such activities are called “busy work” and have nothing to do with generating profits. Your time is far too precious to waste on such mundane tasks.  9. Your System Is Not Scalable Enough  A business environment changes constantly. When you begin adding new products, services, or client segments, your spreadsheet logic becomes exceedingly complicated. Ultimately, the rigidity of your system becomes the reason it fails.  10. Poor Quality of Customer Service  If the customer needs information regarding their order status, do you need to place them on hold while checking three different spreadsheets? If there is a lack of integration within the data, providing a quick and personalized experience for customers becomes quite difficult.  The Takeaway  Microsoft Excel and Google Sheets are nothing to be embarrassed about; in fact, it is an integral part of business development. Knowing when to move away from outdated solutions is critical to taking back control of your time and protecting your sensitive data. You are ready to remove the training wheels and embrace a professional business management platform.
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Multi-Location Inventory: A Day in the Life of the Business Central Replenishment Engine
05
Jan

Multi-Location Inventory: A Day in the Life of the Business Central Replenishment Engine

Managing inventory across several warehouses, stores, and distribution centres is one of the most difficult tasks in today’s business. Inventory misalignment, transfer delays, unnecessary purchases, and lost sales can quickly damage the bottom line and customer satisfaction. Microsoft Dynamics 365 Business Central solves this problem by using its own replenishment and planning engine, which continually assesses demand, availability, and geographical-based inventory to maintain your network in a balanced state. In this article, we will walk through how Business Central accomplishes multiple locations when it comes to inventory on a day-to-day basis. Demand and Inventory are Re-Evaluated As the orders begin to flow in, whether through e-commerce, POS terminals, or B2B sales, Business Central can record this demand and update the inventory automatically by location because of every sale, every shipment, and every return. The replenishment engine evaluates: Rather than being responsive in times of shortage, Business Central is proactive in determining possible risks of stock. Location-Level Planning Begins Business Central looks at inventory planning by location, not only on a global basis. This is very important in a multi-site environment. The system assesses: On this basis, Business Central establishes whether to meet the demand by: This is to ensure that there is no unnecessary buying considering that products already exist in other parts of the network. Planning Parameters Shape Intelligent Decisions Each replenishment proposal is based on the planning configuration of each item, which consists of the following: These enable Business Central to calculate the following: This makes the replenishment process predictable rather than a result of guesses. Actionable Recommendations are Generated When planners open the Planning Worksheet, they will see the following ‘Action’ suggestions: These recommendations already take into consideration what supply already exists, as well as transit inventory. In planning, requirements are reviewed and approved instead of calculated. Execution After approval, the following are created automatically by Business Central: For transferring, the system: For the purchases, it records: Each step is monitored, and it is quantified through inventory availability. Continuous Re-Planning As the shipment is sent, the following is calculated in Business Central: The planning engine is never static. It keeps changing based on what happened during the day. Why This Matters Without a Replenishment Engine, multi-location businesses typically face the following issues: Business Central eliminates these issues by keeping every location aligned to actual demand and available supply. The result is: Conclusion The Business Central replenishment and planning engine is a background process, but it certainly plays a central role in the flow of multi-location operations. Continuous assessment of demand and supply, along with location-level inventory, makes sure the right products are in the right place at the right time without the help of any person. For any organization managing inventory across several sites, this intelligent capability of planning is sure not to be helpful but indispensable.
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The Secret Life of an Item Card: What Happens Behind the Scenes When You Post a Transaction
22
Dec

The Secret Life of an Item Card: What Happens Behind the Scenes When You Post a Transaction 

The Item Card in Microsoft Dynamics 365 Business Central might seem basic, a place to put the basic product details like description, cost, and inventory levels. But the moment you post a transaction, a purchase, sales order, or transfer, the Item Card springs to life.  Behind all that, there is a complex choreography of costing, ledgers, reservations, availability, and so on. That’s what, in fact, makes Business Central so powerful. This blog reveals the secret life of an Item Card in Microsoft Dynamics 365 Business Central and describes what happens under the hood when you hit Post.  1. The Item Card Isn’t Just a Form, It’s a Control Centre  Think of the Item Card as the command hub for everything related to your product.  Each domain drives how BC will treat transactions, cost, reservations, or replenishment.  2. How the Item Card Handles the Purchase  Posting a Purchase Order receipt triggers the following actions in Business Central:  a. Item Ledger Entries are created.  BC pens a new entry recording:  This becomes part of the item’s inventory history.  b. Value Entries are generated  These store the financial impact of the receipt, including:  c. Costing Method decides valuation  Depending on whether the item uses FIFO, Average, Standard, LIFO, or Specific, BC assigns cost layers differently.  d. Availability updates instantly  On-hand inventory increases the moment the receipt posts. Behind the scenes, the Item Card updates fields such as:  3. Sales Posting: How BC Depletes Inventory and Calculates Cost of Goods Sold  When you post a Sales Shipment or Invoice, the Item Card invokes its costing logic:  a. Inventory is reduced  BC identifies which cost layer to use based on the costing method and reduces on-hand quantity.  b. Outbound Item Ledger Entry is created  Documenting:  c. Cost of Goods Sold is calculated  Value Entries are made by using the correct cost layer.  For instance,  Every outgoing transaction refers to its precise incoming origin.  4. Routine of Cost Adjustment Begins to Work Silently  If costing isn’t fully known at posting for example, expected cost, then BC schedules Adjust Cost, Item Entries in the background.  This process:  This is the reason you might see cost adjustments “jump” into financial reports later.  5. Reservations & Item Tracking Kick In  When you post, BC checks:  Item Card settings determine whether the system:  Item tracking ensures traceability at every stage for inventory.  6. The Replenishment System Wakes Up  Posting a receipt or shipment may trigger planning actions:  This is where the Item Card acts as a feeder into Business Central’s full planning engine.  7. Posting Groups Determine the Financial Effect  Posting of an item is not just an inventory update; it is an accounting event.  The Item Card’s Inventory Posting Group and General Posting Group determine which G/L accounts are used for:  When you post, the Item Card sends instructions to the G/L via Posting Groups.  8. The Item Card Updates Its Own Statistics  After every posting, BC updates key fields automatically:  These fields become the source for reports such as:  9. If posting is wrong, reverse transactions activate  When users reverse a transaction, BC doesn’t delete anything.  Instead, it creates:  The Item Card assures full auditability.  10. All This Happens in Seconds Automatically  Every click of Post runs a full chain reaction:  All powered by the humble Item Card.  Concluding Remarks:   The Item Card in Microsoft Dynamics 365 Business Central is the brain of Inventory within Business Central. What seems to be a simple product record is a deeply interconnected engine controlling:  Traceability Analytics Knowing what goes on behind the scenes will help users troubleshoot, optimize, and trust the data Business Central provides. 
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