What is a limitation typically associated with a blanket purchase order?

A blanket purchase order (PO) is a long-term agreement with a supplier to purchase goods or services over a specified period, often used for recurring or high-volume purchases. A key limitation is that itshould not extend past a specified timeframe, as blanket POs are typically set for a defined duration (e.g., one year) to manage pricing, terms, and supplier commitments. Extending beyond this timeframe without renegotiation can lead to pricing discrepancies or supply chain issues.

The web source from NetSuite explains: “A blanket purchase order covers multiple deliveries over a set period, but it is limited by a specified timeframe to ensure pricing and terms remain valid.” This directly supports Option B. The other options are incorrect:

Option A: Blanket POs can be used for both goods and services, not just services.

Option C: Payment terms for blanket POs vary and are not restricted to same-day wire transfers.

Option D: Blanket POs are designed for multiple deliveries over time, not a specific delivery date.

The IOFM APS Certification Program covers “Invoices,” including the use of purchase orders in invoice processing. The curriculum’s focus on “peer-tested best practices” supports the understanding of blanket POs and their time-bound nature.