Explanation Of Blanket Purchase
What is blanket purchase order?
The use of blanket purchase orders enables you to procure a variety
of consumable materials or services from a vendor up to a predefined value
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.
A blanket purchase order contains a value limit and is valid for a predefined
period. It has the document type FO. The extended validity period replaces
individual delivery dates which are normally specified in POs.
The most important characteristics of a blanket purchase order are:
You create a blanket PO for the desired validity period.
The PO need not contain any specifications.
You set a value limit.
It is not necessary to record and accept services performed against the
order. During the validity period of the purchase order, incoming invoices
are posted directly with reference to the PO, provided that the value limit
is not exceeded.
As a rule, the individual items procured have different account assignments.
However, the account assignment information does not usually become available
until the time the invoice is processed. You therefore have the opportunity
to specify the account assignment in the purchase order if you wish (and
if you are in a position to do so), but you do not have to do this until
the time of invoice entry.
Order type FO (framework order)
– Validity period in header of purchase order (field selection)
Item category B (limit)
– Limit 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
- For Item category B which stands for "Limit" is used in Blanket PO
- For such item category we use order type - Framework (FO)
- For these item no material no required
- In PO account assignment category "U " is allowed
- Usually used for low value items
- These PO are having validity period & value limit
- Invoice posting is with Blanket PO
- No GR
I hope this will give you idea of Item category B and its application
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