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
Note:
- 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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