Once any holds have been removed from a sales order, and the system has determined that the order can be shipped (based on the Partial flag in the order, the scheduling window, and other criteria); a picklist is produced for the lines that can be shipped to the customer. If a nonstock item was entered on the order and it is not flagged as a vendor shipment line, it will generally be printed on the first picklist you generate for the sales order (this is due to the fact that the nonstock item is fully allocated when the order line is completed). The picklist will list the default location for the nonstock item even though the item is not tracked in the warehouse.
The items on the picklist are then invoiced to the customer. When a non-stock item is invoiced, the system updates the reserved, total reserved and allocated quantities for the item. The on hand quantity of the item is not updated. Inventory Activity records are created to record the transaction. If a price or cost is associated with the non-stock item, the price and cost of the non-stock item will be recorded in the invoice. Any prices or costs for non-stock invoice lines will be posted to the general ledger accounts specified in the product line that the non-stock item is assigned to (these should be non-inventory accounts since non-stock activity is not reflected in the general ledger inventory control account).
If a nonstock item was entered on the sales order and flagged as a vendor shipment, the nonstock line will be included in the first vendor shipment invoice for the sales order. As the operator selects the vendor shipment purchase order to be invoiced, the system will automatically load the nonstock sales order line to the invoicing program along with the lines for the specified PO.