What Is a Blanket Order?
A Blanket Order is a Purchase Order used to handle the repetitive purchase of products and/or services. Departments must accurately assess the grand total amount on the Blanket Order. The grand total amount is only an estimate and is not a commitment to the supplier that this amount will be spent. The initial amount is encumbered (removed from your budget), and may be increased/decreased during the period.
Also known as a blanket purchase order, the blanket order is a business document that authorizes a vendor to provide goods and services to a customer on an ongoing basis. The terms of the agreement usually specify elements of the arrangement such as the type of goods and services that will be provided and the unit price that the customer will pay for each delivered item. Blanket orders also usually provide detail on how long the agreement is to remain in place, and any other terms and conditions that may be relevant to the nature of the working relationship between the supplier and the client. Blanket purchase orders are utilized by many businesses of all sizes. In many instances, the document serves as a means of ensuring that employees of the customer do not attempt to purchase goods or services from unauthorized vendors. At the same time, vendors often extend special rates to customers who are willing to agree to purchase up to a certain dollar amount of products within a given time
