Purchase Contracts

Comprehensive guide to Purchase Contracts and Blanket Purchase Orders in NetSuite.

Overview

PURCHASE CONTRACT LIFECYCLE
═══════════════════════════════════════════════════════════════════

SOURCING              CONTRACTING           PURCHASING
────────              ───────────           ──────────

┌──────────┐         ┌──────────┐          ┌──────────┐
│  RFQ     │         │ Purchase │          │ Purchase │
│ Request  │────────►│ Contract │─────────►│  Order   │
│ Quote    │         │          │          │          │
└──────────┘         └──────────┘          └──────────┘
     │                    │                      │
     ▼                    ▼                      ▼
Vendor Quotes       Agreed Terms            Fulfillment
                    Pricing                 Receiving
                    Approval                Invoice

What is a Purchase Contract?

A Purchase Contract is an agreement with a vendor that establishes:

Pre-negotiated pricing for specific items
Terms and conditions for purchases
Quantity commitments (minimum/maximum)
Effectivity period (start and end dates)

When you create purchase orders linked to a contract, the agreed pricing and terms are automatically applied.

Purchase Contract vs Blanket PO vs Standard PO

Feature	Purchase Contract	Blanket PO	Standard PO
Purpose	Price/terms agreement	Volume commitment	Single purchase
Pricing	Tiered/quantity pricing	Fixed price	Per-order price
Duration	Date range	Date range	One-time
Commitment	Min/max amounts	Quantity commitment	Order quantity
Linked Orders	Multiple POs	Release orders	N/A
Use Case	Ongoing purchasing	Bulk buying	Ad-hoc purchase

When to Use Each

USE CASE DECISION
───────────────────────────────────────────────────────────

Question: Do you have a negotiated agreement with vendor?
    │
    ├── YES: Question: Is it quantity-based or price-based?
    │        │
    │        ├── Price-based (tiered pricing) ────► Purchase Contract
    │        │
    │        └── Quantity-based (bulk buy) ───────► Blanket PO
    │
    └── NO: ──────────────────────────────────────► Standard PO

Key Benefits

Benefit	Description
Price Lock	Guaranteed pricing throughout contract period
Auto-Apply	Terms automatically apply to linked POs
Compliance	Ensures purchases follow agreed terms
Tracking	Monitor spending against commitments
Efficiency	Reduced negotiation per purchase
Alerts	Notifications for expiring contracts

Prerequisites

Feature Enablement

ENABLE PURCHASE CONTRACTS
───────────────────────────────────────────────────────────

Navigation: Setup > Company > Enable Features

Transactions Tab:
  ☑ Purchase Orders          (Required)
  ☑ Purchase Contracts       (Required)
  ☑ Blanket Purchase Orders  (If using BPOs)
  ☑ Request for Quote        (Optional, for RFQ workflow)

Required Permissions

Permission	Level	Purpose
Purchase Contract	Create/Edit	Manage contracts
Purchase Order	Create/Edit	Create linked POs
Vendor	View	Associate vendor
Item	View	Add items to contract

Contract Statuses

CONTRACT STATUS FLOW
───────────────────────────────────────────────────────────

┌─────────────┐         ┌─────────────┐         ┌─────────────┐
│   Pending   │────────►│  Approved   │────────►│   Active    │
│   Approval  │         │             │         │             │
└─────────────┘         └─────────────┘         └─────────────┘
                                                       │
                                                       ▼
                                                ┌─────────────┐
                                                │   Expired   │
                                                │             │
                                                └─────────────┘

Status Descriptions:
  Pending Approval  - Awaiting approval workflow
  Approved          - Approved but not yet effective
  Active            - Within effectivity dates, usable
  Expired           - Past end date

Task	Path
View Contracts	Transactions > Purchases > Purchase Contracts > List
New Contract	Transactions > Purchases > Enter Purchase Contract
New BPO	Transactions > Purchases > Enter Blanket Purchase Order
Contract from RFQ	Transactions > Purchases > Request for Quote

Contract Setup - Creating contracts
RFQ to Contract - Quote workflow
Contract Pricing - Tiered pricing
Blanket Purchase Orders - BPO guide
Contract Fulfillment - Creating POs
Approval Workflow - Approval process

Overview​

What is a Purchase Contract?​

Purchase Contract vs Blanket PO vs Standard PO​

When to Use Each​

Key Benefits​

Prerequisites​

Feature Enablement​

Required Permissions​

Contract Statuses​

Navigation​

Related Topics​