What is a Blanket Purchase Order?: A Blanket Purchase Order (also known as a standing purchase order) is an agreement arranged between an organization and a supplier to deliver goods or services at a predetermined price on a recurring basis for a specified time period (typically 1 year).
Purchase order (PO) is an official offer issued by a buyer to a seller, expressing the consent to purchase an amount of goods for an agreed price. Purchase orders can only be formed in a business sense where a transfer of physical goods is intended. A purchase order is a written agreement.
A planned purchase order is a long-term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.
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. If you use encumbrance accounting, the purchase order may be encumbered since the required information is known.