Explanation Of Blanket Purchase Order

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 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. 

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.

  • 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.
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)
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 and usage.

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