Strategies to Simplify the Purchasing Card Process
Whether you are implementing a new Purchasing Card program or expanding one that is already in operation, one of the greatest challenges is getting the balance right between necessary business controls and the associated cost and complication of compliance, ease of use issues, and expanding penetration to cover a greater percentage of low-dollar purchases. The good news is that with some careful planning, along with a close look at the approaches followed by your peers, it is likely that improvements in both ease of use and penetration can be made without sacrificing business controls.
During a recent PeercastTM in Peeriosity’s Corporate Card research area, a member company shared its approach to simplifying the Purchasing Card process. Their implementation has experienced significant success – the $3B building products company with 10,000 employees has roughly 1,500 cards issued, with 25,000 transactions per month and an average spend per transaction of USD $350.
One simplification opportunity discussed was to handle the card administration effort more efficiently. Here are some examples:
- A simple card request process using a standard form, with manager approval, using common limits based on role
- A standard process for online card ordering by a Purchasing Card Administrator, with cards and PINs mailed directly to the employee’s home by the provider
- Card maintenance and terminations (using a file from Payroll) can be handled by either the Help Desk or the Card Administrator
Other opportunities exist to create process efficiencies. Examples include:
- Setting up defaults to specific GL accounts (for example, office expenses)
- Automatically “sweeping” transactions under USD $100 to a unique account to prevent any reclassifications for low-dollar purchases
- Receiving a daily file from the card provider of all posted transactions
- Daily e-mails to cardholders for new posted transactions that require their attention
- Provide cardholders with online banking access to review reports
- Monthly approval of card transactions by the cardholder’s supervisor
- The monthly approved report and receipts are scanned by the cardholder for retention
Several controls were also discussed, including:
- Blocking MCCs that are not relevant to the business
- Receiving immediate notification from the card provider when mass card compromises occur so that there can be a coordinated effort for card reissue, as necessary
- Improvements in technology, including moving to EVM chips to reduce fraud, with each transaction treated as a “one-time use” so that stolen card data cannot be misused.
A supporting iPollingTM question suggests that better policy design is the greatest opportunity to improve efficiency in the Purchasing Card process (42%), followed by improvements related to technology (25%) and receipt management (17%). Here are the details:
The second iPollingTM question asked about improving the satisfaction of Purchasing Card process among cardholders. Interestingly, 75% of the responses involved receipts, with 58% citing opportunities to automate the receipt submission process, and 17% citing the opportunity to reduce the number of receipts that need to be submitted in the first place. Making the Purchasing Card policy less restrictive (17%) and improving cardholder training (8%) were also mentioned as opportunities.
Many companies have a decade or more of experience with Purchasing Cards, yet, for many, opportunities remain to leverage best practices of their peers and implement simplified processes that take advantage of the latest techniques and resources that are available. With the large volume of transactions that are appropriate for a Purchasing Card, continuing to focus resources on improvement in this area can pay big dividends.
What opportunities exist at your company to improve the Purchasing Card process? What are your biggest opportunities to improve cardholder satisfaction?
Who are your peers and how are you collaborating with them?
“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
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