7 Replies Latest reply on Jul 8, 2009 10:38 AM by user2042120

    Service PO

      I have a case where the user makes a contract with a vendor for 2 yrs, and pays him on a quarterly basis. I can create a standard PO for the entire amount at the beginning. Then, as and when bills are paid to the vendor, create PO matching invoices and corresponding payments. Is this solution fine? Or, should I use a blanket PO for this? In general, under what conditions should I use a blanket PO?

        • 1. Re: Service PO
          Standard purchase orders are created for one–time purchase of various items. You create standard purchase orders when you know the details of the goods or services you require, estimated costs, quantities, delivery schedules, and accounting distributions.

          Blanket purchase agreements are created when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you do not yet know the detail of your delivery schedules.

          For your requirement, create a Blanket PO, and create releases (You can issue a blanket release against a blanket purchase agreement to place the actual order) when ever you require goods & pay for the same.

          • 2. Re: Service PO
            But I place the order only once in my case. I just pay him on a quarterly basis. So, why should I use a blanket PO?
            • 3. Re: Service PO
              Blanket PO is also created once. Only blanket releases needs to be created when ever you want the goods. You can raise the releases quarterly and pay for the same.
              • 4. Re: Service PO
                I am procuring service. And on placing the order once, the vendor is going to provide me service throught the tenure of the contract.I do not need to place multiple orders for his service. So. wouldn't a standard PO suffice?
                • 5. Re: Service PO
                  I think both can be used
                  IT depends on you as in which one suits your needs most and looks appropriate to you

                  Jyoti was right too with the point mentioned

                  • 6. Re: Service PO

                    There are various ways to have workaround on this withour service procurement as the above posts says.
                    However, to keep it simple (based on your requirement), you can open a standard (one-timed) purchase order with several shipments (based on the payment schedule you perform to your suppliers). Every time a payment due, receive the PO and create invoice matched to the receipts.

                    Hope that helps,

                    • 7. Re: Service PO

                      As one of the suggestion both(standard & Blanket PO) will serve the purpose and it depends upon ur business requirement.

                      But I think if you use Blanket PO there is one advantage in case if Encumburance is on for OU.

                      Reason being in case of Blanket PO fund get encumbrared at the time of Blanket release. SO it will affect budget in respective period in whihc service is procured.

                      incase of Standard PO(Total amount of PO) get encumbered in the period of PO creation.

                      So by using Blanket PO we can have better/more accurate Budgeting control.