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A comprehensive Guide to Purchase types

If your brand or company works directly with the vendors, the success of your products and business relies on the fact that how much you know the industry.

One of the most engaging ways is to familiarize you with the 4 main purchase types. All of them have equal importance in the typical world of accounting and business. To understand these terms you need to have patience and time and the four differ in a lot of ways.

Develop an understanding of different types of purchases:

Moreover, you must try hard to optimize the overall process of purchase and develop an understanding of different types of it. It is completely resourced intensive to approve all types of purchases.

As the digital revolution comes, many companies have initiated the process of purchasing processes to limit errors and improve the overall efficiency mechanism.

Here we are going to have a look at the different types of purchase orders. The blog also revolves around the concepts of automated workflows.

Key Terms of purchase orders:

First of all, let’s have a look at brief purchase types and also know how about the basic accounting terms.

  • Encumbrance deals with the business revenue which works best for specific purposes such as liked purchase orders.
  • Release deals with the process once you complete the purchase order such as the completion of the previous purchase order.
  • Distributions of accounting: This is the money that you set aside and after purchase items are complete is sent to the vendors.

As you might have got the brief concepts of accounting terms used in business, now let’s just switch to the more deep research about the 4 purchase types.

Let’s enlist these 4 types and then have a look at them one by one.

  • CPO means contract purchase orders
  • PPO means planned purchase orders
  • SPO means Standard Purchase Orders
  • BPO means blanket Purchase Orders.

      CPO (Contract Purchase Orders):

One of the most important types of purchase orders and it deals with very less amount of detail. It also describes the circumstances between a business owner and a vendor.

Contract purchase orders are usually defined as the contract that discusses the fact that there exist purchase orders for the future. It also provides detailed guidelines for whatever occurs in the future.

Why choose CPO?

CPO assists in setup the future purchase orders. Its main purpose is to raise an established CPO against the contract. It should also meet the needs of the customers.

Some of the successful Contract purchase types also must agree upon the time frames for future planned purchase orders. For your business, brand, or start-up only a trusted vendor and office manager can create a CPO to make a smooth ordering process for the future.

  • PPO (Planned Purchase Orders):

It contains a similar level of detail as a standard purchase order. On the other hand, you can say that its delivery date and location are not specified.

In these scenarios, the timings of the purchase types are one of the most important details. Planned purchase orders are also individual purchase orders that a business or startup can release as needed.

Companies, startups, and businesses use a typical PPO to replace or restock items. Moreover, these items also need restocking at different intervals.

PPO is one of the most recommended and used purchase types.

  • SPO (Standard Purchase Orders):

Most of us are already familiar with the standard purchase orders. So, companies mostly use them for one-time orders.

Standard purchase orders require a large amount of specific information in comparison with the other types.

SPO standard purchase orders also require the greatest certainty and without any future contracts, it is expected from a vendor to complete the order.

  • BPO (Blanket Purchase Orders):

A blanket purchase order is sometimes also named the standing order. It is defined as an agreement for future purchases.

A blanket purchase order also consists of the same details as the planned purchase order. But here the quantity of needed items is unspecified along with the details of actual purchase delivery.

So, the BPO (blanket purchase order) also places the vendor in a precarious position. Even they also fulfill the limit for a maximum quantity that your company orders at a time.

It is also one of the most amazing purchase types.


To send all purchase types successfully, it is very important to set up an automated purchase. After the completion of the approval process, the vendors get purchase orders smoothly.

Vendors, Managers, and especially business accountants all take equal benefit from the efficiency of proper workflow. It also holds the condition logic carrying easily to use drag and drop interface.

This blog is a comprehensive guide to different types of purchases. It entails everything that you need to know to make your company stakeholders up to date.

Whether it’s about standard, blanket, contract, or planned purchase orders, you must know about all these.

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