Knowledge Management

Question:
hai
Can anyone highlight the need for a blanket PO and how to go about creating one.
thanks
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thanks a lot
kirti
Answer:
Hi Kirti,
With certain procurement transactions, the costs of procurement are disproportionately high in relation to the value of the material or service involved. This is frequently the case with office supplies (such as pencils and notepads) and services of relatively minor importance (such as small repairs, cleaning work, and courier services).
The main advantage of using blanket POs is thus the associated reduction in order processing costs. Transaction costs are lower with blanket POs because:
1) The blanket PO is valid for a longer period.
2) There is no goods receipt or service entry.
3) It is not necessary to create PO items for individual procurement transactions.
When creating a blanket PO, you should use the document type FO since this document types causes the header fields 'Validity Start' and 'Validity End' to become mandatory entry fields. Furthermore, you have to enter the item category B in the PO item overview. The entry of this item category causes the 'Limits' tab page to appear on the item detail screen. There, you can enter an overall limit and an expected value. In the standard system, the account assignment category U (unknown) is allowed for PO items of item category B and therefore, you need not specify the account assignment until the time of invoice entry. In additions, when creating a blanket PO, you need enter neither an order quantity nor a net price. As soon as the expected value is specified during the creation of blanket PO, it is automatically adopted as the net price.
Cheers,
HT