Value Credits for Stock Items - is this a viable solution? (Drop Ship Whs)

Question

Hi all
I seem to have a solution for a long standing problem and have tested it but not tried it for real so was interested in your comments. It uses a drop ship warehouse to achieve the result but I donu2019t want to implement on site if it might also be doing things that I am unaware of. It all started off with some testing of drop ship warehouses, which I think is pretty poor functionality in B1, extract from my report below:
"The disadvantages of SAP drop ship functionality all centre around the fact that it does not generate stock movements. You lose audit trail and some reports that users may rely on eg stock usage. Also because there is no stock movement the item cost is not updated (ave or FIFO). This also means that you do not get a cost of sale on the sales order or invoice, if you have set the GP Base Price to item cost, and no COS in sales analysis. The sales invoice journal generated also does not post COS, just sales, but note that as there is still no stock transaction it can be invoiced before the PO receipt or invoice. And as the purchase receipt does not generate a stock transaction there is no journal and therefore no accrual (GRNI). The AP invoice just posts an expense to P&L but only when the supplier invoice is received. So it screws stock movements, item cost, sales analysis, P&L, BS accruals and there is little in the way of control."
However, this set me thinking about using it for value credits, report extract as below:
I realised whilst I was testing that the drop ship warehouse could be used very effectively to deliver a solution for something that has caused me much grief over the years. When you use the drop ship warehouse stock movements are never generated. Consider a customer who has been overcharged for goods and requires a credit. Historically, the advice has always been to issue a u201Cserviceu201D credit against a GL code because an u201Citemu201D credit document would book stock back into the warehouse and reduce the reported quantity of goods sold, which is not required. The downside of the service credit is that whilst GL postings may be OK sales analysis is now incorrect. But using a drop ship warehouse on the credit note line we get a document against the itemcode, stock is not updated and the credit value does appear in sales analysis as well as GL. Perfect! So we could create a warehouse, marked as a drop ship warehouse but clearly labelled as u201CVALUE CREDITS ONLYu201D, to be used for this purpose
What does anybody think about this solution - are there any downsides?
Thanks
Bruce

Answer 1

Hi Bruce,
Your understanding of Drop Ship is mostly correct.  The proposal sounds good.  The main point of the Drop Ship function would be no stock involved.  You really do not need to label it is bad or poor. It is only useful for people who need it. If you could utilize the function for your goal, go for it.
Thanks,
Gordon