Inventory Backorder Flag

There is a BO or Backorder Flag that is maintained in each Catalog and Inventory record in the system.  This flag is normally synchronized at the Catalog and Inventory levels.  The Inventory Backorder flag is used during order entry to determine if warehouse shipments can be entered for an item when there is not sufficient quantity available to fill the quantity in the sales order line.  The Inventory Backorder flag allows you to block entry of sales orders that would cause you to backorder an item and is used by the purchasing department to control the items that can be sold in the system.

The Inventory Backorder flag applies only to sales order lines that are identified as warehouse shipments and it only applies to items that are identified as stocking (i.e. where the system tracks the quantity of the item in inventory).  Vendor shipment and special order lines and nonstock items are ignored by the system when the system checks the Backorder Flag Maintained in each inventory item.

As each order line is entered into the system, the system checks to see if the order line is for a warehouse shipment and if it is for a stocking item.   If so,

      The system checks the Inventory record for the item to determine if Backorders are allowed for the item.  If the Backorder flag in the item is set to Y, the system allows entry of the order line quantity regardless of the available quantity for the item.

      If the Backorder flag in the inventory record is set to N, the system determines the available quantity for the item (the on hand quantity less the quantity already reserved for open customer sales orders and shop orders for the item).  The system then limits the quantity that can be entered for the sales order line item to the available quantity in inventory (the on hand less the reserved quantity for the item) when the line is created.

Again, the system does not block entry of a vendor ship, special or nonstock line based on the Inventory Backorder flag as these order line types either require you to place a purchase order for the item (vendor ship, special order), or they are for items where the available quantity is unlimited (nonstock items).

The Vendor shipment and the Special flags in each inventory item also allow you to completely control whether each item in the system can be processed using each fulfillment method.  For example, if an item is set up as stocking and is set to No Backorders, and the Special Order and Vendor Ship flags are set to N, the item may not be backordered, special ordered or vendor shipped.   If the Backorder flag for an item is set to N and the Special Order flag is set to N, and the Vendor ship flag is set to Y or to Blank (allowed), you may not backorder the item on a warehouse shipment, or enter a special order line for the item, but you may have your vendor ship the product directly to the customer.

The Inventory Backorder flag is also checked by the Order Completion program.  This allows the system to close out any order lines for warehouse shipments for the item to handle situations where the inventory backorder flag for the item is changed after order entry, and before the first invoice for the order is processed.

If the sales order line being invoiced is for a stocking item, and it is being shipped out as a warehouse shipment, the system checks the Inventory Backorder flag, and if the flag is set to N, the system closes the remaining quantity on the sales order line (this logic prevents a backorder situation that results from the invoicing process instead of from the order entry process).