Procurement Using Blanket Orders (for Low-Value Items)
Purpose
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.
Prerequisites
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.
Process Flow
You create a blanket PO for the desired validity period.
The PO need not contain any service specifications.
You set a value limit.
Service entry and acceptance are unnecessary. 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 (PO items) 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 able to), but you do not
have
to do so until the time of invoice entry. Since a simplified and accelerated procurement process is involved, provision is only made for single account assignment in the PO item. You can change this to multiple account assignment when recording the incoming invoice.