Bill on Receipt products on backorders

If BOR products are backordered, the inventory type on the order is typically converted from customer-owned to distributor-owned. When backordered BOR products are received in a Storeroom warehouse, they are received as distributor-owned. After backorders are filled, the remaining stock is converted to customer-owned and the customer is invoiced for the remaining amount only.

The backordered BOR products are invoiced as each order is filled. To invoice the customer one time and track backordered BOR products against a single receipt, you can select Customer in the Bill on Receipt - Demand Billing field in Product Warehouse Description Setup-Storeroom. This causes the inventory type on backordered BOR lines to remain customer-owned when they are received on a purchase order or warehouse transfer.

Backorders with customer-owned products are not filled during the receiving process. If Bill on Receipt or Both is selected in the Auto Invoice Shipped Orders field, these actions occur after the receiving processing is complete:

  1. The Sales Entry Processing Invoice Processing Report runs automatically.
  2. The BOR lines are converted from distributor-owned to customer-owned.
  3. The Sales Entry Processing Back Order Fill Report runs to fill the customer-owned backorder line items.

If the Storeroom warehouse does not auto invoice shipped BOR orders, the Sales Entry Processing Back Order Fill Report must be run. A user can manually run the report, or it can run daily as a stored report after the receiving is complete.

If these conditions are met, the Sales Entry Processing Back Order Fill Report is only run once after the Sales Entry Processing Invoice Processing Report, but not as part of the receiving process:

  • Customer is selected in the Bill On Receipt - Demand Billing field.
  • All products received in Purchase Receipt of Inventory Entry or Transfer Receipt of Inventory Entry are BOR products.

If you select Distributor in the Bill On Receipt - Demand Billing field, the BOR products are received as distributor-owned, and backorders are filled before invoicing occurs. The remaining stock is converted to customer-owned inventory and the customer is invoiced for this amount. The invoice does not match the full amount received. The backordered BOR products are updated with the actual price and cost.

If you change the Bill On Receipt - Demand Billing field to Customer after Storeroom is first implemented, any outstanding BOR backorders are received as distributor-owned. These lines are filled first, and the customer billed for the difference. New backorders are received as customer-owned. Full receipts do not match invoices until all BOR backorders are filled.