3PL Warehouse Management with Dynamics 365 Business Central

A third-party logistics (3PL) provider might store goods for several businesses in the same warehouse. One customer pays per pallet stored, another per order picked, and a third needs custom labelling before goods leave the building. Each has its own stock records, service levels, billing rules and reporting requirements.

The warehouse might process every order correctly and still lose money if chargeable activities never reach finance. Customers also expect accurate stock figures, reliable despatch updates and invoices they can reconcile.

3PL warehouse management software needs to connect the physical movement of goods with the commercial agreements behind each service.

Microsoft Dynamics 365 Business Central provides an ERP foundation for finance, purchasing, sales and inventory. Depending on the operation, warehouse execution can sit in Business Central, a dedicated warehouse management system (WMS), or a combination of the two.

For UK logistics providers, the decision is not simply whether to add a WMS. It is about identifying which warehouse processes need better control, how customer-specific requirements are managed and how completed work becomes an invoice.

Key Takeaways

• Mobile warehouse execution improves the recording of stock movements and warehouse tasks through scanning and guided workflows.

• Multi-client 3PL management handles customer-specific stock, service requirements, operational processes and agreements.

• Activity-based billing turns completed warehouse services into charges under each customer's contract.

• Business Central can provide the ERP foundation, with extensions or specialist systems added where requirements justify them.

• A useful software assessment follows one customer workflow from goods receipt through despatch and billing.

Three Different Requirements Behind 3PL Warehouse Software

These requirements overlap, but they are not interchangeable.

Mobile warehouse execution concerns what warehouse staff do on the floor. Barcode scanning, guided picking, put-away and despatch confirmation help ensure that transactions reflect the physical movement of goods. Tasklet Mobile WMS is one option to assess when the priority is mobile, barcode-driven execution within Business Central.

Multi-client 3PL management concerns how a logistics provider runs operations for different customers. That includes customer-specific stock records, handling instructions, service agreements, reporting and operational rules. Boltrics 3PL Dynamics is worth evaluating when these requirements extend beyond basic warehouse transactions.

Activity-based billing concerns how warehouse work becomes revenue. Storage, goods receipt, picking, packing and relabelling may each have different charging rules. The system needs to capture the activity, associate it with the right customer and apply the agreed rate.

A provider might need all three capabilities. Another might already manage customer agreements and billing in its ERP but need better scanning on the warehouse floor. The first step is to identify the gap rather than assume one product will solve every problem.

What Business Central Handles—and Where a WMS Fits

Business Central includes inventory and warehouse functionality for receiving, put-away, picking and shipping. Available workflows depend on the warehouse configuration. Microsoft's warehouse picking documentation explains some of these options.

A separate WMS is not automatically necessary for every 3PL. The decision depends on customer-specific stock controls, warehouse complexity, reporting requirements and billing rules.

These are different types of solutions, not direct substitutes for one another. Tasklet focuses on mobile execution, Boltrics addresses a wider 3PL operating model, and Lanham EDI supports electronic document exchange.

Which should a 3PL assess first?

If warehouse staff struggle to record receipts, movements and picks accurately, start by assessing mobile execution. If the bigger problem is managing stock and service rules across multiple customers, examine the wider 3PL operating model first.

If both are issues, test the complete process. A scan that records a pick correctly is useful, but the same transaction must also reach the appropriate order, customer record and billing process where required.

Before choosing a product, confirm the actual workflow with the vendor. Product descriptions alone will not establish whether a particular contract, exception or charging rule is supported.

Connecting Warehouse Activity to 3PL Billing

3PL billing involves more than charging for the number of orders despatched. Contracts might cover receiving, storage, picking, packing, returns, transport and value-added services such as kitting or relabelling.

Each charge needs a defined basis. Storage might be calculated by pallet position and time, receiving by pallet or carton, and picking by order line or unit. Relabelling could be charged per unit, batch or job.

A reliable billing process connects four things:

1. The customer agreement: rates, billing periods, thresholds, exceptions and contract dates.

2. The completed activity: what work took place, for which customer and in what quantity.

3. The calculated charge: the applicable rate and any relevant adjustment.

4. The invoice: the resulting charge, traceable to the activity and agreement.

Boltrics' invoicing documentation describes how billable entries from warehouse activities, agreements and other sources can feed sales invoicing. The relevant functionality and configuration should still be confirmed against the proposed implementation.

Worked example: From warehouse activity to customer invoice

Suppose a 3PL provider has agreed the following illustrative rates with an online retail client for one month. These are hypothetical contract rates, not UK industry benchmarks.

A pallet-month represents one pallet position occupied for one month. The warehouse records the completed activities, and the billing process applies the client's agreed rates. Finance reviews exceptions before raising the £671 invoice.

Now consider a more specific problem. Warehouse staff relabel 50 units as requested, but the job is recorded only as a general stock movement. The physical work is complete, yet the billing team cannot identify it as a chargeable service for that customer. Unless someone spots the omission, the £15 relabelling charge disappears from the invoice.

The workflow should capture the customer, completed service, quantity, applicable rate and a traceable activity reference. Completing a warehouse task and creating a billable record are two separate events. The process must connect them.

A similar gap can occur when an interface transfers only 112 of the 120 completed order lines. The picking charge falls from £96 to £89.60, leaving £6.40 unbilled. A reconciliation between completed work and billable records should flag the missing lines before the invoice is finalised.

Integrating Business Central with a 3PL WMS

Before selecting an integration method, establish which system owns each record and when information must move. In one deployment, Business Central may manage more warehouse transactions; in another, a dedicated WMS may handle most execution.

Typical exchanges include:

• Orders: Business Central sends order details for fulfilment.

• Goods receipts and inventory: Confirmed quantities, movements and adjustments update the appropriate records.

• Despatch: The warehouse system returns confirmed quantities and available shipment details.

• Item data: Product references, barcodes, weights, dimensions and units of measure are mapped between systems.

• Billing events: Confirmed chargeable activities reach the relevant billing process.

Microsoft's Business Central API documentation describes REST API options for exchanging data with external systems. APIs suit application-to-application communication; EDI handles structured business documents required by trading partners; and SFTP file exchanges can suit batch processes or older systems.

The integration design should define how failed messages, duplicate records, retries and quantity differences are handled. It also needs a clear owner for investigating exceptions and approving corrections.

EDI in Practice: From Retailer Order to Despatch

A retailer might send an order electronically to its supplier, whose ERP passes a warehouse shipping instruction to the 3PL. After picking and despatch, confirmation returns to the supplier so its records can be updated. The supplier then follows the retailer's requirements for the advance shipment notice (ASN) and invoice.

In some ANSI X12 warehouse-outsourcing arrangements, EDI 940 carries a warehouse shipping order and EDI 945 reports warehouse shipping advice. These message types are not universal; trading partners may use different standards and sequences.

Before implementation, confirm the required document types, ASN deadlines, pallet and carton identifiers, labels, acknowledgements and procedures for rejected documents. GS1's EDI standards overview explains the role of electronic messages in supply-chain transactions.

Lanham EDI is one option to assess for Business Central, but support for the specific documents and partner mappings must be confirmed.

Common Problems to Resolve Before Go-Live

The most useful tests reflect the exceptions the warehouse actually encounters, not just a straightforward order.

• Item codes and units of measure: Map internal SKUs, retailer GTINs and carton or pallet quantities before exchanging live orders.

• Inventory differences: Define how teams investigate short receipts, unposted transactions and physical-count discrepancies. Do not automatically overwrite one system with another.

• Customer-specific work: Test relabelling, kitting, returns and other services that carry separate charges. Confirm how each activity is recorded against the right customer and agreement.

• Partial shipments and EDI errors: Test incomplete orders, rejected documents and corrected despatch confirmations.

• System ownership: Specify which application controls item data, stock movements, order status and financial posting.

These decisions should be settled during process design and tested before go-live. Otherwise, the warehouse may appear to operate successfully while finance discovers missing transactions at month-end.

Assess Your 3PL Workflow with Dynamics Square UK

Choosing 3PL warehouse management software starts with understanding how customer contracts translate into warehouse work, inventory records and invoices. A useful first step is to map one customer's journey from goods receipt through storage, picking, despatch and billing. This reveals where records are created, where information transfers between systems and where chargeable activities might be missed.

Microsoft Dynamics 365 Business Central can provide the ERP foundation, but the right setup depends on warehouse workflows, customer contracts, billing rules and existing systems. Dynamics Square UK offers Business Central implementation, consulting, customisation and integration services. Explore its Business Central services to understand the available options.

Planning a 3PL warehouse management project? Contact Dynamics Square UK to assess one customer's workflow from receipt through despatch and billing, identify gaps between warehouse activity and invoicing, and determine which requirements suit standard Business Central, a mobile WMS or a specialist 3PL solution.