A business does not need to stock every item it sells. It may offer a large, specialised, or made-to-order product that a vendor can send directly to the customer. That can be good for cash flow and warehouse space. It becomes messy when one person has to manually connect the customer order, vendor order, shipment, and invoices. The risk is not only extra typing. The wrong vendor might be asked to ship. A customer can be told an item is on the way when nobody has confirmed it. The purchase invoice may sit waiting because the sales invoice is not ready. Business Central's drop shipment process is designed for this exact situation: a vendor ships an item directly to the end customer, while the related sales and purchase documents stay linked.
The Order Nobody Stocks
The problem starts with a customer asking for an item the business does not carry in its warehouse. In a manual process, sales raises its order. Purchasing creates a separate vendor order. Then someone keeps a spreadsheet to make sure the quantities and customer address still match. A drop shipment changes the route. The sales order line is marked for drop shipment, and the purchase order is set to ship to the customer address. Business Central links the two documents, so the purchase order uses the prepared sales order information and the vendor is instructed to ship directly to the customer. This is different from a special order. With a special order, the vendor ships to your warehouse first and you send the item on. With a drop shipment, the item bypasses your warehouse completely. That is the reason the link between the two orders matters so much.
One Connected Promise
Once sales and purchasing work in separate systems, a customer promise can be lost between them. The salesperson knows the customer needs the item. The buyer knows a vendor order exists. Neither person can see the whole picture without asking around. In Business Central, the drop-shipment sales order and purchase order remain connected. Staff can see the linked purchase order from the drop-shipment sales line. The vendor can ship to the customer's address rather than to a receiving dock that will never see the item. The vendor's shipping detail can also be kept with the purchase order. For example, a tracking number can be added as a comment line. That is a small detail, but it can prevent a customer service person from having to search through an inbox when a customer asks where the delivery is.
A Simple Example
Consider a small office supplier that sells a specialised printer to a customer. The supplier does not normally keep that model in stock because it is expensive and ordered infrequently. Without a connected process, sales enters the customer order. Purchasing sends the vendor an email. The vendor ships to the customer. A few days later, the customer calls to ask for an update. Sales looks at its order, but it cannot see whether purchasing received a shipping confirmation. Someone opens a spreadsheet, searches email, and hopes the reference numbers match. With a drop shipment, the sales line is set up for direct delivery and linked to a purchase order for the vendor. The vendor ships straight to the customer. The sales shipment can be posted after the vendor ships, and the related purchasing document is part of the same connected flow. The business still controls the sale without adding an unnecessary warehouse step.
Faster Purchase Orders
The old manual hand-off can become a bottleneck when there are many drop-shipment orders. A buyer may have to move between sales orders, a requisition worksheet, and purchase orders just to create the vendor documents. That is work that adds delay but no value for the customer. From April 2026, Business Central can create purchase orders directly from sales orders that are set up for drop shipment. The system suggests a vendor from the item or stockkeeping unit, and staff can change the vendor when needed. Drop shipments are also included when order planning calculates what needs to be purchased. The planning worksheet has dedicated drop-shipment actions for bringing in sales orders and working with them. That means a business can handle direct-delivery demand through its normal planning process instead of treating each order as a separate exception. For higher volumes, the requisition worksheet can also collect outstanding drop shipments and create purchase orders in a batch. The benefit is less switching between pages and fewer chances to overlook an order that has already been promised to a customer.
Invoices on Their Own Time
A shipment and two invoices do not always arrive on the same schedule. A vendor may require payment before the business is ready to invoice the customer. Under a process that forces those invoices together, the finance team can be stuck waiting for the wrong document. Also generally available from April 2026, Business Central lets a business post the purchase invoice for a drop shipment independently of the related sales invoice. The purchase invoice can be posted from the purchase order or using received lines, even when the customer-facing sales order has not been invoiced. This better matches real work. The business can record what it owes the vendor when that obligation is due, while sales invoices the customer on the agreed customer timetable. The linked documents remain useful, but finance is no longer forced to make two separate obligations happen at once.
When Plans Change
Mistakes are unavoidable. A vendor can ship the wrong item, a customer can change the order, or a shipment can be posted before the details are confirmed. Previously, correcting an uninvoiced drop shipment could mean credit memos, quantity adjustments, or rebuilding lines by hand. From April 2026, Business Central lets staff undo a sales shipment that originated from a drop shipment when neither the sales shipment nor the related purchase receipt has been invoiced. Undoing the shipment reverses the linked purchase receipt and creates the correction entries needed for the reversal. This is not a reason to skip checks. It is a safer way back when a genuine mistake is caught before invoicing. The team can correct the process instead of layering workarounds over an order that was wrong from the start.
Why It Matters
Drop shipment is useful because it lets a smaller business sell a broader range without holding every item in stock. It only works well if the customer order, vendor order, shipment, and invoices do not break apart as soon as the item leaves the vendor. Business Central keeps those documents connected from the sales order through direct delivery and invoicing. The newer purchase-order, independent-invoice, and shipment-reversal improvements remove some of the manual friction around the process. The customer gets a simpler experience, and the team has fewer separate records to chase.