A Blanket Purchase Order is an agreement arranged between an organization and a supplier to deliver goods or services at a predetermined price on a recurring basis for a specified time period (typically 1 year).
A Blanket Purchase Order can also be known as a Frame Order, a Standing Order, or a Blanket Agreement.
The main purpose of the Blanket Purchase Order is to reduce administrative costs when posting regularly as well as when agreeing to purchase services/goods.
When to use a Blanket Purchase Order:
When making repetitive and pre-specified purchases from the same supplier within a certain time frame (typically 1 year).
When ordering standardized products or services that require numerous shipments.
When not to use a Blanket Purchase Order
When the price is unknown at the time of purchasing.
When the price is subject to change without notice.
When ordered items can be changed by the supplier without notice.
Here is the workflow of the Blanket Purchase Order:
To turn on/off the Blanket Purchase Order:
To create the Blanket Purchase Order:
The Blanket PO additional fields:
- validity days: the time period when the Blanket PO is active and available for Invoice posting
- first delivery date: the date when the Supplier should start the deliveries
- amount of the deliveries: the number of goods you expect delivered
- tick box "Non-stock items": the received items from this PO will not affect the stock balance. It appears only when you use the Inventory.
To create an Invoice for the Blanket PO:
All posted Invoices are calculated in the Blanket PO.
You can see the available amount for the Invoice posting on the Blanket PO page.
To create a Receipt for the Blanket PO:
The process is similar to Invoice creation.
Navigate to the Receipt page* and find the Create Receipt button.
*Note that you should have a Receipt role to be able to create a receipt.
All the receipts are shown in the item table.
When all the items are received, the Purchase Order status regarding delivery changes to received.
To view all Blanket Purchase Orders
Filter them by using the Purchase Order Type filter