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Blanket PO

Former Member
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Hi Experts,

1) what is the use of Blanket purchase Order

2) Advantage of Blanket PO?

explain me with scenario

Thanks

Anand

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Blanket Purchase Order:

Purchase order with a validity period and limits for the simplified procurement of materials or services. A longer-term blanket purchase order enables you to procure different materials or services from a vendor up to a specified maximum value.

Use:

You can create a purchase order which has a longer validity period (for example, a year) and an item-specific value limit.

Using such a blanket purchase order, it is possible to procure different consumable materials or external services, for which more detailed individual processing (purchase order, goods receipt, invoice entry) is considered uneconomical.

The materials or services are grouped under a heading or superordinate term (short text) and represented as an item of the blanket order. Prices for the individual materials (for example, 0.50 USD/pc for a pencil, 2.00 USD/pc for a file etc.) are not recorded in the purchase order.

This special procurement process differs from the u201Cstandardu201D process mainly by virtue of the fact that certain steps are deliberately omitted in the system.

Although you can use a purchase requisition as the document immediately preceding the blanket purchase order, neither RFQs nor contracts may be created for the requisition. Neither are goods receipts or performed services recorded in the system.

Advantage:

A key advantage of the blanket purchase order is the reduction in processing costs. The cost saving is due to the following factors:

Different materials and/or services are procured over a longer period with a single PO item.

It is not necessary to issue separate purchase orders for the individual procurement transactions.

There is no goods receipt or service entry process.

Characteristics of Blanket Purchase Orders:

The most important characteristics of a blanket purchase order are:

Order type FO (framework order)

Validity period in header of purchase order (field selection)

Item category B (limit)

Limits in the item

No material number

Account assignment category U (unknown) is allowed

No goods receipt or service entry

Accounting data for the item suggested in invoices

Additional or multiple account assignment possible in invoice verification

Check of validity period and limit in invoice verification

Regards

Prabu

Answers (3)

Answers (3)

Former Member
0 Kudos

Hi check this link

http://help.sap.com/erp2005_ehp_05/helpdata/EN/c3/72cbf155cd11d189660000e8323c4f/frameset.htm

The use of blanket purchase orders (item category B) enables you to procure a variety of consumable materials or services from a vendor up to a predefined value limit.

Most companies have recurring requirements for minor items (such as office supplies, screws, small parts, cleaning work or other routine services) during the course of the year. Issuing a series of individual (discrete) orders of low value (perhaps with voluminous specifications) for such items, and then recording in detail the work done or goods delivered against the order, is frequently considered uneconomical.

Blanket purchase orders enable you to procure low-value items quickly, easily, and efficiently.

regards,

Lalita

BijayKumarBarik
Active Contributor
0 Kudos

Hi,

Blanket purchase order created with validity period and limits for the procurement of materials or services where no GR take place but invoice verification must done for payment to vendor

For more check linkS:

http://wiki.sdn.sap.com/wiki/display/ERPSCM/Blanket+POs

http://www.sap123.com/a/41/#blanket-purchase-orders

http://sapclassic.com/blog/blog/sap-blanket-purchase-orders-1/

Regards,

Biju K

Former Member
0 Kudos

Dear,

A Blanket purchase order used to deal with your vendors where procurement is restricted based on 1) Value 2) time limit or 3) nature of goods.

One vendor who supply Stationery items. For this each time you require 1000 pens, 1000 pencils, 25 box A4 sheet paper, you need to not to prepare purchase order and send. Instead you can create a Blanket purchase order for a value of 1,00,000 Rupees.

You can procure from this vendor, different items until value fulfills 1,00,000 rupees. exceeding this system will not allow.

Now either you can restrict this blanket PO - 1) for 1,00,000 value 2) for supply of one year i.e till end of December 2011 or 3) for the supply of Statationery items.

To serve these petty procurement purposes, Blanket purchase orders used.

Regards,

Syed Hussain.

Former Member
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Hi Syed,

Did you mean it is like Automatic PO?

Your explanation is good. . .

can you explain me little bit briefly for better understanding

Regards

Anand

Former Member
0 Kudos

HI ANAND,

Blanket procurement is nothing but petty cash procurement .

In this you have to use framework order in the place of purchase order.

In purchase order having the expiry period. But in this you do not have expiry until the value exceeded.

in this you could not maintain material masters and vendor masters you can use one time vendors.

I think it is clear for u.