Early delivery: accept, refuse or reschedule out

An order that arrives before its PO date can take dock space you need and start your payment terms early. Receiving gets a quick way to decide what to do with an early shipment, and buyers get the PO wording and reschedule-out timing that keep it from becoming an early cost.

What is an early delivery?

An early delivery is a shipment that arrives before the date on the purchase order line, whether the PO gives a fixed date or a delivery window around it. It matters because receiving, accounts payable and any shelf-life clock on the part start acting on a date your plan didn't ask for yet.

If your PO doesn't say how early is too early, a supplier who ships as soon as material is ready decides it for you. A related case is a PO whose own date sits well ahead of the need date; the fix there is a reschedule-out, covered later in this lesson. An early shipment is also worth logging in purchase order tracking, since it moves the receipt date away from the one your team last confirmed.

Why do suppliers ship early?

Suppliers ship early for reasons that serve their own schedule, not yours. A production line runs smoother without gaps, a batch only pays off at a certain size, and a shipment that ships before month-end lets the supplier invoice and book the revenue now. None of those reasons account for your dock space or your cash.

A machine that takes hours to change over will often run a full batch instead of stopping at your quantity, and ship the rest as soon as it clears inspection. A push to close the month or the quarter moves the invoice onto the current period, whether or not you're ready to receive the parts.

What does early stock cost your team?

Early stock costs more than the floor space it takes on your dock. It can start your payment clock sooner, add handling and storage before the part is due, carry insurance and damage risk longer and, for shelf-life material, use up life the build needs.

Check which date starts your payment clock before you decide the early delivery doesn't matter. Terms that run a set number of days from the receipt date start counting the moment the part crosses your dock, so an early delivery moves your payment date earlier even though nothing about the build changed. Terms that run from the invoice date are less exposed, though a supplier who invoices at ship time still gets paid sooner than the PO intended.

How do you set an early-delivery window on the PO?

Put a stated window in your PO terms, so an early shipment needs your approval instead of just showing up. Pick your own number from your dock space, cash position and the part's shelf life, and write it once into your standard PO terms so it doesn't depend on which buyer placed the order.

As an example, a line reading "no more than 5 business days early without buyer approval" gives receiving and the supplier the same rule to check a shipment against. A shelf-life part or a bulky assembly usually needs a tighter window than a small hardware item you can absorb without a space problem.

What are your options once a delivery arrives early?

Receiving can accept an early shipment and process it like any on-time delivery, accept it but hold invoice or payment processing to the original due date, if your terms allow it, or refuse it under your PO terms. Which option fits depends on the window in your PO, the part's shelf life and whether your dock has room.

This decision happens at the same step as receiving inspection. A shipment inside a stated window, with no shelf-life impact and enough dock space, can be accepted as it is. A shipment outside a stated window, or one that would spend shelf life the build needs, is the case for holding invoice or payment processing to the original due date, where your terms allow it, or refusing it under your PO terms. With no window stated in the PO at all, accept the shipment, or ask the supplier to hold it, and check your contract and counsel.

Early delivery decision at receiving

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A four-step decision flow for a shipment that arrives before its PO date. Step one asks whether the PO states an early-delivery window at all; when no window is stated, receiving accepts the shipment, or asks the supplier to hold it, and checks its contract and counsel. Step two, reached only when a window is stated, asks whether this shipment falls inside it; a shipment outside the window leads receiving to hold invoice or payment processing to the original due date, where its terms allow it, or refuse the shipment under the PO terms. Step three, reached only when the shipment is inside the stated window, asks whether early arrival would spend shelf life the build needs; a meaningful shelf-life loss leads to the same hold-or-refuse choice. Step four, reached only when shelf life is not a concern, asks whether receiving has room and the team can absorb an early cash hit; enough room and cash tolerance leads to accepting and receiving normally, while a space or cash constraint leads to accepting the shipment but holding invoice or payment processing to the original due date, where its terms allow it.

1. 1

   Window stated?

   Question

   Does the PO state an early-delivery window at all?

   If yes

   Go to step 2

   If no

   Accept the shipment, or ask the supplier to hold it, and check your contract and counsel

2. 2

   Inside window?

   Question

   Is this shipment inside the stated window?

   If yes

   Go to step 3

   If no

   Hold invoice or payment processing to the original due date, where your terms allow it, or refuse it under your PO terms

3. 3

   Shelf-life check

   Question

   Would early arrival spend shelf life the build needs?

   If yes

   Hold invoice or payment processing to the original due date, where your terms allow it, or refuse it under your PO terms

   If no

   Go to step 4

4. 4

   Space and cash check

   Question

   Does receiving have room, and can the team absorb an early cash hit?

   If yes

   Accept and receive normally

   If no

   Accept, but hold invoice or payment processing to the original due date, where your terms allow it

In the United States

Under UCC Article 2, the agreement sets the time for tender. UCC § 2-503(1). A tender before the agreed date may fail to conform to the contract, and the buyer may then reject the whole, accept the whole, or accept some commercial units and reject the rest. UCC § 2-601. If your PO schedules deliveries in separate lots, it's an installment contract, and you may reject an installment only if the problem substantially impairs its value and can't be cured. UCC § 2-612(2). Reject within a reasonable time and tell the supplier. UCC § 2-602(1). If the contract time hasn't run out, the supplier may notify you and deliver on time instead. UCC § 2-508(1). States enact the UCC with variations, so write your allowed window into the PO and check your contract and counsel.

Selling into the EU?

EU law doesn't harmonize what a buyer can do with an early delivery, so this shows German domestic law and the CISG. Under German law, where a delivery date is fixed, the presumption in case of doubt is that your supplier may deliver before it but you can't demand it early. § 271(2) BGB. You aren't in default of acceptance (Annahmeverzug) for being temporarily unable to take an early delivery unless the supplier announced it a reasonable time ahead. § 299 BGB. For sales between businesses in different CISG Contracting States (every EU member state except Ireland and Malta), the buyer may take delivery of an early shipment or refuse to take it. CISG Art. 1; Art. 52(1). The seller must still deliver on the date the contract fixes (Art. 33(a)). If the goods are already at your site and nobody from the seller is there, you may have to take possession for the seller and look after them, at the seller's expense (Arts. 86(2), 87). Contracts can exclude the CISG, so check yours (Art. 6).

What happens to shelf-life material that arrives early?

Shelf life usually counts from the date the lot was made, so a supplier who ships early hands you a lot that's older on the day of your build. As an example, a sealant with 12 months of shelf life, made and shipped 6 weeks early, reaches the build with 6 weeks less life than an on-time lot.

AS9100D clause 8.5.4, Preservation, covers the storage, identification and shelf-life control the standard expects during production and before use. IA9100 is expected to replace AS9100D, so check the current edition's clause numbering before you cite it in your own procedures. Run the shelf-life check from clear to build at receiving, against the build date.

When does a reschedule-out still save money?

A reschedule-out saves the most when it reaches the supplier before they buy material or start production. After that, the supplier has money in your order and will often want to ship and invoice on the original date, or charge you to hold or cancel it.

When a reschedule-out still saves cash

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A left-to-right timeline of five milestones between placing a purchase order and the need date, showing where a reschedule-out still saves money. At PO placed, a reschedule-out saves the full cost, since nothing has been bought or built yet. At supplier buys material, a reschedule-out no longer saves in full, since the supplier has money in the order and may ship and invoice on the original date, or charge to hold or cancel it. At supplier starts production, a reschedule-out only partly saves cost: the supplier's cost is spent, but moving delivery can still defer your payment, usually for a hold or cancellation charge. At supplier ships, a reschedule-out saves no cost, since the order is in transit, though moving the receipt date can still delay receipt-based payment terms. At the need date, a reschedule-out is too late to help at all, and the decision moves to the accept, hold or refuse choice made at receiving.

1. 1

   PO placed

   What has happened

   Order sent with a delivery date and a need date behind it

   Does a reschedule-out still save cash?

   Yes, in full: nothing has been bought or built against the order yet

2. 2

   Supplier buys material

   What has happened

   Supplier commits raw material or components against the order

   Does a reschedule-out still save cash?

   Not in full: the supplier has money in the order and may ship and invoice on the original date, or charge to hold or cancel it

3. 3

   Supplier starts production

   What has happened

   Labor and machine time begin on the order

   Does a reschedule-out still save cash?

   Partly: the supplier's cost is spent, but moving delivery can still defer your payment, usually for a hold or cancellation charge

4. 4

   Supplier ships

   What has happened

   The order leaves the supplier's dock

   Does a reschedule-out still save cash?

   No cost savings: the order is in transit, though moving the receipt date can still delay receipt-based payment terms

5. 5

   Need date

   What has happened

   The build requires the part

   Does a reschedule-out still save cash?

   No: too late for a reschedule-out; use the accept, hold or refuse decision at receiving instead

In SAP, MRP raises exception message 15, Reschedule out, in the stock/requirements list (MD04), when a firmed receipt such as a purchase order is scheduled earlier than the current requirement needs it. SAP Help Portal, MRP exception messages. The message tells the planner to check the order against the need date; it doesn't move the order on its own.

If the supplier already bought material or booked capacity against your order, ask what a reschedule-out costs before you request one. A supplier holding purchased material or committed capacity may pass along a cancellation or restocking charge, and your contract terms should already say who bears it.

By default, a readiness signal opens a task when an order will arrive 14 or more days before it's needed, and admins can change that window. Cartograph hands the task to your team or Scout Agent, who emails and calls the supplier to move the date, within the permissions your team sets.

Questions teams ask

Do we have to accept an early delivery?

It depends on your PO terms and the law that governs the contract, and that law differs by country (see the regional notes above). A written early-delivery window in the PO settles it, and your terms can say who pays to return a shipment outside it. Check your contract and counsel.

Does an early delivery start our payment terms early?

It depends on what your terms measure. Terms that run from the invoice date are less exposed, though a supplier who invoices at ship time still gets paid sooner than intended. Terms that run from the receipt date start counting as soon as the shipment is logged in, so an early delivery can move your payment date earlier.

Should we hold the invoice instead of refusing the shipment?

Holding invoice or payment processing to the original due date works well when the part is fine to receive but you don't want to pay early, and your PO terms run payment from the scheduled date or the supplier agrees to it. Record that decision in your ERP so accounts payable and the supplier are working from the same date.

What if the supplier already spent money making the part?

A reschedule-out still moves the delivery date, but it won't return material the supplier already bought or labor it already spent. Check your contract for who bears a cancellation or restocking charge before you ask for a large reschedule-out on an order already in production.

If orders keep arriving weeks before your builds need them, talk to our team about moving those dates out before the supplier ships.

This article is general information, not legal or tax advice. Check how the rules apply to your business with your legal or tax advisor.

Sources (10)

1. UCC § 2-503, Manner of Seller's Tender of Delivery (Cornell LII)
2. UCC § 2-601, Buyer's Rights on Improper Delivery (Cornell LII)
3. UCC § 2-508, Cure by Seller of Improper Tender or Delivery; Replacement (Cornell LII)
4. § 271 BGB, Leistungszeit (gesetze-im-internet.de)
5. § 299 BGB, Bestimmbarkeit der Leistungszeit (gesetze-im-internet.de)
6. UCC § 2-612, Installment Contract; Breach (Cornell LII)
7. UCC § 2-602, Manner and Effect of Rightful Rejection (Cornell LII)
8. United Nations Convention on Contracts for the International Sale of Goods (UNCITRAL), Arts. 1, 6, 33, 52, 86, 87
9. SAP Help Portal, MRP exception messages (PP-MRP), stock/requirements list MD04
10. SAP Knowledge Base Article 2613071, Rescheduling exception message 15 is not displayed in t-code MD04