So How Do Blanket Sales Orders Work?

Let’s say your customer predicts they will need 12,000 computer over the next twelve months. By committing to this quantity, you offer them an additional 20% discount off their current price and agree to ship 100o computer the first of every month. In addition to agreeing to the price and shipping schedule, there are several other factors that should be taken into consideration.

What happens if you’re late delivering or can’t produce to ship the computers ?

What if you manufacture them and your customer then decides they don’t need the product? What if they need more than 12,000 computers ?

It’s imperative to agree to all the terms and conditions of the blanket order up front, and in writing, so both parties understand their respective liabilities.

Once the terms and conditions are settled, the blanket order is entered into your ERP system. The quantity ordered is 12,000, which is then divided into 12 shipments of 1000 each set to expire 12 months from the agreed blanket order date.

Your ERP software should be flexible enough to allow you to revise the dates and quantities, as long as both stay within the terms of the blanket agreement, should your customer request this.

Your ERP software should also include a pending release report that you can run periodically that will list all blanket orders that have pending releases scheduled before a given date. Another important report to have is a blanket order expiration report that will list all orders with pending releases that are due to expire before a certain date. This way, you can make sure all shipments are made before the expiration date.

Using blanket orders is beneficial to both you and your customer. They get great prices and a delivery schedule that meets their requirements. In turn, you’re able to more accurately forecast the materials and resources you need to meet that schedule.