Blanket Purchase Order In SAP MM

Blanket Purchase Orders

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.

Notes:

• Multiple invoices can be processed.
• The main point is that invoices must be processed within the validity period specified in the PO.
• The total value of invoices must also not exceed the limit specified in the PO item.
• The validity period is specified on PO Header Level, while the Limit is on the Item level.
• The creation of a Purchase requisition is Optional.
• Purchase Requisitions don't have validity period fields, although the limit can be specified on the item level.
• So if users create PRs then they could type the validity period simply as text in one of the long text fields.
• During invoicing, if the date is outside the validity period or the amount is bigger, either a Warning or Error will occur. This setting is done by customizing

Examples of where this business process can be used include:

• Services: for example buying flowers, travel.
• Particularly if the receipt process is not very formalized. 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 the Blanket Order process.

Let's look at key fields in the Purchase Order

The Overall Limit is the value that will be used 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 for nonstock 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.

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