Types of Purchase Orders

Types of Purchase Orders (PO types)

Standard Purchase Order: A standard purchase order is a type of purchase agreement with the supplier committing to buy its items or services if all the details like terms and conditions, items, price, delivery dates are, the first priority of choosing a purchase order is given to standard purchase order

Planned Purchase Order: A planned purchase order is a long-term agreement committing to buy it items or services from a single source. We must specify tentative delivery schedules and all details for goods or services that we want to  buy, including charge account, quantities and estimated cost. EX: Buying goods for a festival from a specific dealer.

Contract Purchase Order: We can create contract purchase agreement with our supplier to agree on specific terms and conditions without indicating the goods and services that we will be purchasing . We can later issue standard PO referencing our contracts and we can encumber these purchase orders if we use  encumbrance accounting. buyer can ask any item from the list that is provided by the supplier

Blanket Purchase Order: We can create blanket purchase agreements when we know the detail of goods or services we have plan to buy from a specific supplier in a period , but we do not yet know the detail of our delivery schedules. We can use blanket purchase agreements to specify negotiated prices for our items before actually purchasing them, here the buyer should specify the goods that are needed to his requirement from the list of supplier, tables that effect the blanket po are po_headers_all and po_releases_all

Also read : Procure to Pay Cycle