Why do I need to waste time on purchase orders! Why are there different ones to choose from?
Purchase orders include the details of the product you or your company need. It is filled out by the person in charge of purchasing who then authorizes the purchasing of goods and sends it to the supplier, so they know what is needed.
It’s a way of getting the exact ingredients for you to complete a task or project.
Distinctive purchase order forms are used for different types of purchases. The different types of PO’s include standard purchase orders (sometimes called regular purchase orders), blanket purchase orders, contract purchase orders, and planned purchase orders.
Standard Purchase Order
This purchase order is used to purchase irregular, occasional or a once-off purchase. It is created when you know the details of the goods or services you require, estimated costs and payment terms, quantities, and timeframes for payment and delivery.
A hotel may use a standard purchase order when it purchases new beds or a salon may order basins and mirrors when they open. This is seen as a once-off purchase order, the contract will be fulfilled once the beds or basins and mirrors are delivered in good order.
Blanket Purchase Order
This purchase order involves a purchaser agreeing to purchase certain goods or services from a particular vendor, without necessarily having a specific quantity, price or required a delivery schedule. When you order basic repetitive materials or supplies from a supplier. For example, an office might have a blanket purchase order for purchasing paper, ink and toner supplies for copying and printing functions. A blanket order typically restricts the types of items that can be purchased and sets an individual order limit and a total value limit, as well as an expiration date.
Contract Purchase Order
A contract purchase order gives the vendor details, payment, and delivery terms. This agreement is created with the supplier to agree to specific terms and conditions. Without indicating the goods and services that will be purchased on the basis of an ongoing commercial relationship. To order a product the purchaser may refer to the contract purchase order when raising a standard purchase order with the supplier.
Planned Purchase Order
A planned purchase order is a long-term agreement committing to buy items or services from a single supplier. You must define provisional delivery schedules, quantities, estimated costs, charge account and all the other relevant details of the goods or services that you want to purchase.
Knowing the in’s and out’s of the purchasing process is important for any company and it is crucial that all employees of your company know the difference between purchase orders and how they should be used, so that the company works like a well-oiled machine.
