Microsoft Dynamics 365 Finance and Operations – Standard Process document

Microsoft Dynamics 365

for Finance & Operations

HOW DIRECT DELIVERY WORKS IN DYNAMICS 365?

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

Contents
1. Overview .................................................................................................. 3
1.1 Overview Description: ............................................................................................. 3

2. Direct Delivery orders: ................................................................................ 3

2.1 Setups required for Direct delivery of an item: ........................................................ 3
2.2 Now create Sales order to automatically create Purchase order: ............................ 4

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

1. Overview
1.1 Overview Description:
This document explains the step-by-step process to create direct delivery orders in Microsoft dynamics 365
F&O.

Direct deliveries are deliveries that are sent directly from vendor to your customer. When you create a direct
delivery, the items that you sell never physically arrive at your warehouse. In this case user will be able to
generate a sales order to customer without having stock in inventory and generate a packing list / invoice to
the customer. If we follow the direct delivery process, following are the advantages.

1. Save delivery time.

2. Reduce handling cost.
3. Minimal manual intervention.
4. Customer orders fulfilled on-time (without loss of sales).
5. Operate with minimal inventory.

2. Direct Delivery orders:

2.1 Setups required for Direct delivery of an item:

1. First user needs to set up the item number in the released products which need to be delivered
directly to the Customer from the vendor.
2. Navigate to released products and select the item number for which direct delivery need to be
processed.

3. Then in the “Deliver” fast tab enable the toggle “direct delivery” and select the direct delivery
warehouse from the drop down.
4. This direct delivery warehouse will be used to generate automatic purchase order to vendor once the
sales order is created and “saved”.

5. After that select a vendor for which automatic purchase order need to be created in the released
products.

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

6. Selecting a vendor in purchase tab is mandatory for an item if the “direct delivery” is enabled in the
released products otherwise D365 will not allow you to proceed.

2.2 Now create Sales order to automatically create Purchase order:

1. Navigate to sales and marketing module and click on “New” to create a sales order.
2. Select the customer account (for whom delivery must be made directly from our vendor) and select
the site and warehouse from which the material needs to be billed to customer.
3. Select the order type as “sales order” and then click on “OK” button.

4. Now click on “Add line” and enter the item ID which we configured in the section 2.1
5. Select the variant (if applicable) and enter the quantity for which automatic purchase order need to
be created. Also, note delivery type in the line will be captured by default as “direct delivery”.

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

6. Now user need to click on “save” and Dynamics 365 sends a notification that an automatic purchase
order is created along with the purchase order reference as shown in below image

7. Now user (purchase manager can inform) the vendor offline and get their confirmation for delivering
the material directly to our customer.
8. After getting the confirmation from vendor user can go to the corresponding PO or navigate to
following path to confirm the purchase order (refer below image)
9. If there are multiple purchase orders all of them can be confirmed by using the following page in
procurement and sourcing module.
10. Once user click on “confirm purchase order”, system automatically confirms all the purchase orders
created for “direct delivery” in this page.

11. Now the status of the purchase order (00004551) will change to “CONFIRMED”.

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

12. After that vendor will ship the material from vendor location to our customer location.
13. In this meantime we need to complete the product receipt for the item in the purchase order
(00004551 in this case) and generate the packing slip for the item in the sales order (003587 in this
case)
14. In the same form (as mentioned in point no.8) user will be able to complete the product receipt
15. User need to select the list of confirmed purchase orders in the “delivery” tab for which product
receipt needs to be closed.
16. Then user can do either “full product receipt” or “Partial product receipt” based on the business
requirements.
17. In our case we are going to do full product receipt.

18. Once the product receipt is completed for the purchase order (00004551) the status of the purchase
order is changed to “RECEIVED” and direct delivery status in the lines section is updated as
purchase order shipped.

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

19. Immediately MSD 365 automatically post the packing slip for the item in the sales order without
manual intervention (once product receipt is posted for the purchase order).
20. User can check the posted packing slip in the packing slip journals section in the corresponding sales
orders.

21. Then user can complete the invoicing for both purchase order and sales order to complete the direct
delivery process.
22. Anytime user can check the related purchase order or sales order in both sales order or purchase
order page by clicking on “RELATED ORDERS” as mentioned below.

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 Microsoft Dynamics 365 Finance and Operations – Standard Process document

Delivery address / quantity update:

1. Typically, the delivery address for a purchase order is the company's address.
2. However, when you create a direct delivery, you enter the customer's address as the delivery
address.
3. If you change the delivery address on a purchase order line that has a delivery type of Direct
delivery, the delivery address on the corresponding sales order line is also updated.
4. Similarly, if you change the delivery address on the sales order line, the delivery address on the
purchase order line is also updated.
5. Even if you change the quantity in sales order line, the quantity on the purchase order line
will be automatically updated.
6. User can view the “related orders” to verify the changes as mentioned in point no.22.

DIRECT DELIVERY HELPS MANY BUSINESS TO MINIMIZE LOSS OF SALES AND IT IS AN IMPORTANT
PROCESS IN MICROSOFT DYNAMICS 365 FINANCE AND OPERATION.

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