In this blog, I would like to show you how the new functionality called ‘Blanket Agreement’ works in Business One 8.82.
Blanket agreement (BA) is a brand new functionality introduced in Business One 8.82. It is used to manage the long-term business transactions with vendors or customers. The functionality enables you to maintain all relevant information for each party involved in the business transaction.
The Blanket Agreement is located under the Business Partner module. It has header information and 4 tabs: General, Items, Documents and Attachments.
The Blanket Agreement can be linked to a marketing document. When you create a marketing document, e.g. an AR Invoice, and the system detects that there is an approved blanket agreement existing for this Business Partner and Item, the ‘Blanket Agreement’ field on the Invoice will be filled out automatically. When checking the Blanket Agreement -> Document tab, you can see that the invoice is also linked.
Only one approved Blanket Agreement per period is allowed for the same Business Partner and Item. Once the Blanket Agreement is set to ‘approved’, no overlapping BA is allowed.
The Open Quantity and the Open Amount in the Blanket Agreement will be updated according to the value movements of the marketing document.
The calculations are as follows:
Open Qty = Planned Qty – Cumulative Qty (in the marketing documents)
Open Amount = Planned Qty x Unit Price – Cumulative Amount (in the marketing documents)
If it is a non- stock item, the Unit Price works the same way as a stock item depending on how you define the blanket agreement; however, the Open Quantity or Open Amount will not be affected by marketing document.
Blanket Agreement Types
There are 2 types of Blanket Agreement: General and Specific.
(Screenshot – UK loc. – 8.82 Patch 4)
If the Agreement Type is General, the option ‘Ignore Prices Specified in Blanket Agreement’ will be checked automatically. The item price in the marketing document will not take the item price defined in Blanket Agreement.
In this case, the price on the Blanket Agreement will be ignored and the logic of the unit price follows current rules for marketing documents.
If the Agreement Type is Specific, the option ‘Ignore Prices Specified in Blanket Agreement’ will be unchecked as default, that means we cannot ignore the Blanket Agreement unit price, so the item price in the marketing document will be taken from the Blanket Agreement.
(Screenshot – UK loc. – 8.82 Patch 4)
Blanket Agreement with Sales Bill of Materials (BOM)
When an item is a sales BOM, the behavior depends on the setting in the ‘For a Sales BOM in Documents, Display’ are of the Document Settings -> General Tab.
If the ‘Price for Component Items’ is ticked, the marketing document will always take the component item’s price. In this case, the Unit Price defined for the Parent Item in the Blanket Agreement will not be considered, but its open quantity and open amount fields are affected as marketing documents are created.
A Blanket Agreement is created for Parent Item ‘P001’, 100 units with a Unit Price of GBP 60.00. This parent item requires 2 units of component item ‘C001’.
In the AR Invoice below, the Unit Price of item ‘C001’ is GBP 20.00.
Thus, when computing the cumulative amount from the marketing document, the Unit Price of the component will be used regardless of whether the Blanket Agreement is General or Specific. Thus:
Cumulative Amount = Parent Qty x (Component Qty Per BOM x Unit Price of Component)
Cumulative Amount = 2 x (2 x GBP 20.00) = GBP 80.00
If the ‘Price and Total for Tree Only’ is ticked, the Parent Item’s price will be taken into account when creating a marketing document. The normal Blanket Agreement rules apply.
Blanket Agreement with Template (BOM)
When the item is a BOM Template, it also follows the normal rule of the Blanket Agreement.
General Type – The marketing document takes the appropriate price list of the item instead of the price on Blanket Agreement. The Open Qty, Open Amount fields will be reduced according to the actual values of the marketing document.
Specific Type – The price of the Parent Item in the Blanket Agreement will be taken. If the Component item also has a Blanket Agreement defined with the same Business Partner, this price will also be taken into the marketing document.(Screenshot – UK loc. – 8.82 Patch 4)
Blanket Agreement with other SAP Business One Functions
- Only Specific Type Blanket Agreements can be considered in MRP Reports.
- Approved Blanket Agreements can be added to the Cach Flow Report calculation.