What is a blanket purchase order?
A blanket purchase order is a PO in which a customer places with its supplier to allow multiple delivery dates over a period of time, often negotiated to take advantage of predetermined pricing. It is normally used when there is a recurring need for expendable goods or services.
When to Use a Blanket Purchase Order
Departments may identify a requirement to issue a purchase order to a supplier where the delivery of the goods and/or services occurs multiple times over a distinct period of time. For example, consulting services that may be quotes at a price for the entire period but will be billed in installments based on when the consultant actually works, then submits an invoice periodically to cover only that particular period of work.
How to Determine Your Type of Blanket Purchase Order
- Fixed Price - An agreement in which the supplier will invoice Rice on a pre-determined, recurring schedule (ie: Monthly, Quarterly) for a fixed amount
- Draw Down - An agreement in which the supplier will invoice Rice at irregular intervals and irregular amounts, either when work is complete, or goods are delivered.