Blanket purchase order workflow

  • Release version: Xanadu
  • Updated August 1, 2024
  • 2 minutes to read
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    Summary of Blanket purchase order workflow

    The Blanket Purchase Order (BPO) workflow in ServiceNow facilitates streamlined procurement when a shopper is uncertain about the delivery date during checkout by creating a purchase requisition with a blanket order type. This generates a blanket purchase order that enables repeated purchases within defined limits without requiring approvals for authorized users, groups, cost centers, or departments as specified by purchasing permissions.

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    Key Features

    • Creation of Blanket Purchase Orders: Triggered when a shopper selects "I am not sure" for delivery date, resulting in a purchase requisition with blanket order type.
    • Purchasing Permissions: Define which users or groups can purchase against the blanket purchase order without approval, streamlining the procurement process.
    • Receipt and Invoice Handling: Receipts and invoices are not applicable and thus hidden for blanket purchase orders to reflect their nature.
    • Standard Purchase Order Releases: These are generated against the blanket purchase order when specific criteria are met, such as:
      • User requesting the purchase is authorized under purchasing permissions or is the original business owner of the blanket order.
      • Purchase line creation date falls within the blanket order’s validity period.
      • Supplier product is defined on the blanket order.
      • Available funds exist on the blanket purchase order (Released amount less than Total amount).
    • Tracking and Status Updates: Standard releases reference the blanket purchase order and appear under its Purchase Order Releases related list. The Released amount field sums all standard releases, and when fully utilized, the blanket purchase order status updates to Closed Complete.
    • Approval for Overages: If a release amount exceeds the blanket order limit, an approval is triggered for the overage (delta) amount by the business owner of the release.

    Practical Application

    ServiceNow customers can use the blanket purchase order workflow to manage ongoing or uncertain delivery date purchases efficiently. The system ensures compliance with purchasing limits, enforces permissions, and automates approval processes when release amounts exceed set thresholds. This results in better control over procurement budgets and simplified purchasing for authorized users, while maintaining visibility through related purchase order releases and status tracking.

    During checkout, when a shopper selects I am not sure in the delivery date option, it creates a purchase requisition with a blanket order type, which results in the creation of a blanket purchase order.

    Purchasing permissions define the list of users, groups, cost centers, or departments that are allowed to purchase against the blanket purchase order without requiring any approvals. As receipts and invoices are not applicable for blanket purchase orders, these related lists are not displayed on the purchase order form view.

    For details on the various fields and related lists that are populated for a blanket purchase order, see Purchase order.

    Standard purchases against a blanket purchase order

    A standard purchase order release is created when the following conditions are satisfied:
    • User who requested the purchase is defined under the associated purchasing permission of the blanket purchase order.

      The business owner who requested the original blanket purchase order can always release against the blanket purchase order even if they are not explicitly defined under the purchasing permission.

    • Creation date of the standard purchase line falls within the range of the blanket line’s start and end date.
    • Supplier product purchased is defined as a supplier product on the blanket purchase order.
    • Funds must be available on the blanket purchase order. The value of the Released amount field on the blanket purchase order must be less than the value in the Total amount field.

    The standard purchase order release has a reference to the blanket purchase order and will be displayed under the Purchase Order Releases related list on the blanket purchase order.

    On the blanket purchase order, the sum of the total amount of all released purchase orders is updated in the Released amount field of the Summary Details section. When the value of the Released amount field matches with the value of the Total amount field, the status of the blanket purchase order changes to Closed Complete.

    If a purchase order release amount results in the blanket purchase order amount being exceeded, an approval is triggered for the delta amount to the business owner of the applicable standard purchase order release.

    For example, if a blanket purchase order exists with an associated purchasing agreement contract with validity from January 1, 2019 to December 31, 2019. The amount limit on the blanket purchase order is $1000, and the current released amount is $800. The next standard purchase order release against the blanket is for $500. So, an approval for the delta of $300 is required.

    To check if a request should be considered as a release against an existing blanket purchase order:
    • For goods, check the creation date of the purchase request against the start and end date of the corresponding line on the blanket purchase order.
    • For services, check the start and end date of the request against the start and end date of the corresponding line on the blanket purchase order.