Blanket agreement is a term used in SAP Business One, a popular enterprise resource planning (ERP) software for small and medium-sized businesses. It refers to a type of agreement between a buyer and seller where the buyer agrees to purchase a specified quantity or value of goods or services from the seller over a specific period, usually a year.
In SAP Business One, blanket agreements are used to streamline purchasing processes and reduce administrative costs. They allow buyers to order goods or services from a vendor without having to create purchase orders for each individual transaction. Instead, a single blanket agreement is created, which specifies the terms of the purchases, such as the price, quantity, and delivery schedule.
When creating a blanket agreement in SAP Business One, the buyer can set up multiple line items for different products or services, each with its own quantity, price, and delivery date. This allows for easy tracking and management of individual items within the larger agreement.
Blanket agreements can also be used to negotiate better pricing and terms with vendors. By committing to a larger purchase volume over a period of time, buyers can often secure discounts or other favorable terms from vendors.
In SAP Business One, blanket agreements are typically used for repetitive purchases of non-inventory items such as maintenance services, marketing services, or travel expenses. However, they can also be used for inventory items if the buyer has a stable demand for a certain product.
To manage blanket agreements in SAP Business One, buyers can use the Purchasing module to create and maintain agreements, generate purchase orders based on the agreements, track delivery schedules, and manage payments and invoices.
Overall, blanket agreements are a useful tool for streamlining purchasing processes, reducing administrative costs, and negotiating better pricing and terms with vendors. In SAP Business One, they are easy to create and manage, making them an attractive option for small and medium-sized businesses looking to optimize their procurement processes.