Overview of Purchase Agreement in Odoo16

A purchase agreement is a legally binding contract between a buyer and a seller that outlines the terms and conditions for purchasing goods or services. It serves as a formal agreement between the parties involved and provides a framework for the transaction. When we finalize a purchase order, we can ensure a mutual agreement between the vendor and the customer regarding the purchase agreement. For that, Odoo provides a dedicated purchase agreement feature within the Purchase module for creating and managing purchase agreements. This agreement allows you to create multiple agreements with the same or different vendors, encompassing various products. These agreements can then be referenced when creating purchase orders in Odoo, facilitating a seamless integration of the agreed terms into the procurement process. So let’s see how Odoo enables a user these add-ons.

To access the Purchase Agreement feature in your Odoo Purchase module, you must enable the “Purchase Agreement” option within the module’s Settings menu. Once activated, you will utilize the functionalities related to purchase agreements in Odoo.

Types Of Purchase Agreements

When you enable the Purchase Agreements feature, it provides you with two types of purchase agreements: Blanket Orders which can be found under the Orders tab in the Purchase module, and the Call for the Tender option under the Alternatives tab in a new purchase order creation window.

Calls for the tenders

1. Calls for tenders enable you to solicit bids from multiple suppliers for a specific product or service. By using this option, you can initiate a competitive bidding process to obtain the best price or quality. It offers you to create and manage RFQs, compare quotations, and make informed purchase decisions.

In order to access this, click on the Create Alternative option in the alternatives tab, which opens a wizard. Within the wizard, you can select a vendor for the alternative purchase order and choose to copy the products from the initial purchase order.

By creating multiple alternatives, you can view a list of RFQs generated under these alternatives. To make a decision, you can use the “Compare Product Lines” button, which allows you to assess factors such as lead time, on-time delivery (OTD), and the total amount. This comparison enables you to determine which vendor offers the most favorable terms. You can even choose to purchase specific products from one seller and others from another.

Once you have made your selection, you can proceed with the RFQ. When confirming the RFQ, a warning for alternatives will be displayed, giving you the option to retain or cancel the other choices.

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Blanket Order

2. A Blanket Order is a type of purchase agreement where you establish a long-term contract with a supplier for the supply of goods or services. It allows you to define the terms, such as quantities, pricing, and delivery schedules, for a specific period. By accessing the “Blanket Orders” option under the “Orders” tab, you can create and manage these long-term agreements with your suppliers.

In the form, fill the corresponding fields required, such as the purchasing representative you want, vendor, currency type, deadline for the agreement, ordering date, source document, and the company. Add the products in the products tab one by one. You also have the option to describe the terms and conditions you wish to add. Now click on the save button to create a draft of the form.

Using the Confirm option, you can now confirm the blanket order. Odoo will switch the blanket order’s status from draft to Ongoing as soon as you confirm it. Once the deadline has passed, the agreement will be automatically changed to the Closed state.

You can build new RFQs and Purchase Orders in Odoo using this blanket order. I will immediately fill the corresponding fields of the RFQ with the information provided in the purchase agreement. This blanket order may be used more than once to buy the same item from the same vendor during the defined time limit.

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