What Is a Blanket Purchase Order?
Blanket Purchase Order in SAP MM for Consumable Materials
Blanket Purchase Order (Po’s) are often appropriate for low value materials and are used to procure consumable materials and services that are frequently ordered from the same supplier. Blanket Purchase Order’s are valid for a longer term-such AS for a year or two-and with a value limit.
Business Scenario
Consider, for example, a business that supplies their offices with general cleaning and janitorial supplier ordered on a bi-weekly or monthly basis. This company should use a blanket PO rather than creating a separate PO each time they need,supplies. When the material is consumed or services are performed, an invoice is posted in the system reference to the PO, and no goods receipt are posted.
Blanket Purchase Order in SAP MM
The Blanket Purchase Order process has several business advantages that result in lower transaction costs, as follows:
- Blanket Purchase Order’s are valid for the long term; therefore, you don’t need to create them every time you reorder supplies.
- A goods receipt isn’t required.
- Material master records aren’t required.
Blanket Purchase Order Process Steps
The process steps in a Blanket Purchase Order are similar to those in the indirect material procurement process, but there is no goods receipt posting. Proceed as follows:
1. Create the purchase requisition.
Create the purchase requisition via Transaction code ME51N and select document type FO ( framework order ). Enter item “B – Limit”, quantity, UoM, plant, material group, overall limit, and any one of the account assignment categories such as cost center.
2. Create the PO
Create the PO. via Transaction code ME2lN with reference to the purchase requisition. Enter the vendor, validity start date and end date.
3. Post the invoice
On receipt of the invoice from the vendor, post the invoice in the system via transaction code MIRO. Enter the document date. posting date and PO number. The PO will copy the item and quantity. Enter the amount and save. Before saving you can check the account posting via Simulation button.