Back Ordering Methods

Task/Problem Overview

This document will cover the backorder process in Savance Enterprise. Back ordering is when you are low on stock for an item that a customer would like to purchase, and you need to order more of the item from your vendor. There are a couple of situations where this may be handy:

• You don't have an item in stock, and you would like to order the item from your vendor so that you can send it to your customer.

• The item is in stock; however, the customer does not need the item right away, and you do not want to deplete your current inventory.

• The customer ordered more than the in-stock amount, so you would only like to order some of the purchased amounts from your vendor. For example, if you have 10 in stock and your customer purchased 15, you may only need to backorder 5 of the item.

Methods of Back Ordering

The first option you have is to do a "Whole Order Back Order", which means that you will back order everything on the quote (regardless of what is in stock and what is not in stock). This may be done if you don't want to backorder individual items, and would rather backorder everything on the current quote. To do this, check the BO box in the Header tab of the quote, as seen below.

The second option you have is to do a "Line Item Back Order". This means that only certain line items will be back-ordered. To backorder a single line item, scroll over to the B/O column of the quote, and mark the checkbox for any item that you would like to backorder, as seen below.

You may back order any number of line items. For example, perhaps a quote has two items where one is in stock and the other isn't. You have the option to backorder only the item that isn't in stock. Also, let's say a customer orders 15 of an item, but there are only 10 in stock. If you want to backorder all 15 items, you may check the B/O box for this line item. If you would like to backorder only 5 of this item, you will have to create two line items: one with quantity 10 (these will not be back-ordered since they are available) and one with quantity 5 (these will be marked as back-ordered since they are not in stock). These different scenarios may be useful, based on the specific back-ordering process of your organization.

Automatically Create PO’s

Once you convert a quote to an order, you will notice that any line items that were not back-ordered will have a shipper created like usual in the Shipper tab. The process for these items follows the typical shipping process since these items are in stock and need to be delivered. (NOTE: that this would not happen if you use Whole Order Back Order since all items would be back-ordered.)

However, the back ordered items still need to be purchased from the vendor. You may create an RFQ manually for these items by clicking Create RFQ / Purchase Order in the Links tab of the quote. If you would like to automate this process, you also have the option of checking the PO Now checkbox before converting the quote so that the RFQ will be generated automatically.

Either way, the RFQ will be created and added to the Links tab of the Order once it is converted. You can click on that link to open up the RFQ.

Warehouse Changes

Let's look at the changes in the warehouse for each inventory item during the process of back-ordering. Assume that we are back ordering a single line item on a quote because there are none in stock. The changes that are made to the Current Warehouse Values will be highlighted after each step. Increases in values will be highlighted in green, and decreases will be highlighted in red.

First of all, when the quote is converted to an order, the Back Ordered value will increase since you have back-ordered an item. Once the RFQ is converted, the OnOrder value will increase since you have now actually ordered the item from the vendor.

Now you will wait for the vendor to ship the item to you. In the PO, open the receiver from the status tab. Once you have received the item from the vendor and put it away, you can post the receiver to Put Away. Now when you open the Order, you will notice that a shipper has now been created since the items have been put away.

There are a couple of warehouse values that have changed here. Back Ordered and OnOrder has decreased since you are no longer in the process of ordering this item from your vendor (you now have the item in your warehouse). The Allocated, Location On Hand, and Reserved values have all increased. Allocated means that the item is associated with an order, where it is associated with the Line Item Back Order in our case. Reserved means that it is in stock to fulfill a back order; in other words, it is in your warehouse but reserved for a customer who has already purchased it. And finally, Location On Hand means that the item is present in your warehouse.

Now in the shipper, you can pick a holding bin and post the item to Picked. The item has now moved from Location On Hand to Holding Bin On Hand.

Next, you will post the item to Packed. However, there is no change here since the item is not technically in a different stage in the warehouse.

Then you can post the item to Staged. Now the item has moved from Holding Bin On Hand to Staged On Hand. NOTE: You will have to click on “Show Detailed Information” to see some of these values.

Now go to Fill All Items > Ship All Items. Then you can post the item to Loaded. All Warehouse values have returned to zero, and the only value seen is InTransit since the item is in the process of being delivered to the customer.

Finally, you can post the item to Delivered. All items have now returned to their original values since our stock and warehouse values are all back to zero, and the back order has finished successfully.

Critical Purchasing

Items on Back Order will be highlighted in Pink in Critical Purchasing.

Process Back Orders Manually

In some cases, you may want to backorder an item, and you do not want to link a PO to it. In other words, the PO and Order are created separately, but they are not linked together. Once you have converted both the quote and the RFQ, you will want to go to Inventory > Shipping > Process Back Orders. This will allow you to process the specific backorder that you have created. Simply select each order you would like to process, and then click OK.

If you check out the Current Warehouse Values, you can see that the Allocated value does not increase until you process the backorder. When the PO is linked, this step will be done automatically. However, if there is a case where you would like to process each backorder manually, you can do so here.