Blanket Order with or without Contract

[Former Member]

Hi Friends,

In the Purchasing, we have Blanket Purchase Order(Frame work order).

As we knew that Blanket order has validity Start and End dates. We are in the confusion that do we need Contract? to place PO.

Please clarify me,Since Blanket order has Validity period.Is it really necessary to have Contract with Blanket order?.

Thanks

Anver

[former_member581212 · Accepted solution]

hi,

If explaining in the simple words, then we know the use of the document type FO along with the enable the functionality of the value limits and the time period in the document...then it may in the contract or may be directly in the PO...

So, you we can understand that we can directly make a Purchase order directly for the blanket req....

If req. to have any internal doc. for the reference then you can create a contract which you can refer while making a PO...

Hope it helps..

Regards

Priyanka.P

[former_member192897]

In SAP, Blanket Purchase Orders refer to the business process where you have a Purchase Order with a validity period (start / end date) and a limit on the item. No Goods Receipt takes place. Payment is triggered by Invoice.

Multiple invoices can be processed. Main point is that invoices must be processed within the validity period spesified in PO. The total value of invoices must also not exceed the limit spesified in PO item. The validity period is spesified on PO Header Level, while the Limit is on Item level. The creation of Purchase requisition is Optional.

Purchase Requisitions doesn't have validity period fields, although the limit can be spesified on item level. So if users create PR's then they could type the validity period simply as text in one of the long text fields.

During invoicing, if the date is outside validity period or the amount is bigger, either a Warning or Error will occur. This setting is done in customising.

Examples on where this business process can be used include: Services: example buying flowers, travel. Perticular if the receipt process is not very formalised. It is also sometimes used for utilities (water, electricity...).

Look at processes where Financial invoices (no PO) are used. To improve control, a lot of vendor invoices could be moved to Blanket Order process.

Lets look at key fields in the Purchase Order

The Overall Limit is the value that will be used to in the check during invoicing. If Commitment is switched on in Costing, the Expected value is the value of the commitment against in this case the Cost Centre. The actual will be posted during invoicing.

Account assignment is mandatory, so this process is non stock purposes only. Stock can not be procured using this method (For stock a GR is required).

Because no Goods Receipt (GR) will take place, the GR indicator is switched off when the item category is selected

[Former Member]

Hi

There is no need to create a contract. Purchase oder will have validiyt date field which it self allows you to give input dates from ___ to ___ dates. No need of contract.

Edited by: ppkk on Oct 16, 2008 4:30 AM