The use of Purchasing Cards for the acquisition of low cost non-inventory items has been a leading practice for decades, with median performance for indirect purchasing volume using Purchasing Cards at 10%, with the mid-point of Q1 performance approaching 40% of indirect purchasing volume.
While many companies have achieved significant penetration, others continue to work through acceptance issues, and overcoming the anxiety regarding the appearance of less control. In addition, completing the requisition steps using a card can be viewed as an inconvenient transfer of work from Purchasing and Accounting to non-purchasing process employees who are already challenged with more work than they have time to complete.
This report examines the current plans for member companies Purchasing Card programs and the criteria used to determine who is issued a Purchasing Card.
iPollingTM Results Review
Peeriosity’s iPollingTM was used recently to get “instant” feedback from member companies, with online poll results and member comments available in real-time as members respond. With incentives to complete the polls, a significant number of companies usually respond within 24 to 48 hours. Members can then see who responded, with options to add to the discussion thread, and with the ability to follow up directly with peers using Peeriosity’s integrated Peer Mail capability.
The first poll question looked at where companies are today with regards to their current Purchasing Card program. Interestingly, even though most have significant experience, 86% have plans to ramp up, or otherwise increase the usage of their Purchasing Card Program. An additional 9% are making plans to modify their program to transition to a One Card design that can be used both for miscellaneous purchases and for Travel expenses. Only 5% indicated plans to decrease the volume of transactions using a Purchasing Card.
The next question in the poll looked at various approaches to issuing Purchasing Cards. For 87% of member companies, Purchasing Cards are issued on a case-by-case basis based on need. For 13%, Purchasing Cards are issued based on job title.
Unlike traditional benchmarking, Peeriosity’s iPollingTM capabilities allow members to very quickly examine this issue in detail, providing a range of experiences and viewpoints that can be reviewed to develop an appropriate and workable answer. Tapping into the experience of peers eliminates guess-work and allows members to quickly access the collective experiences of a large community of users who are facing the same challenges.
Here are some poll comments from responding companies:
- We migrated to a one card solution for travel and goods, materials and services (GMS) in 2014. Authorized employees are allowed to use the corporate card to procure GMS. The cards are Individual Bill/Company Pay.
- We try to limit our PCards to project managers and key admins within the company. Also, a special training class is required.
- We switched to a One Card program approximately two years ago. Employees who do not travel are assigned MCC codes consistent with purchasing, travelers are assigned MCC codes consistent with travel and entertainment and some employees who display the need are assigned MCC codes consistent with purchasing and T&E with manager approval.
- We typically issue PCards to one or two people per department, so that they can support the needs of their group/department.
- We implemented in 2011 in North America and the primary focus has been on growing single use or virtual cards for invoice payments. P-Card plastic spend has been flat, but we are looking for opportunities to grow that medium/eliminate invoices from the process.
The idea of Purchasing Card programs was introduced decades ago, so while the concept isn’t new, for many companies underlying uses and program designs have continued to evolve and change to better capture opportunities and objectively evaluate potential risks. Being fluent in the experiences within your company is vital to continuing to drive expansion efforts; and, when combined with direct visibility into the experiences of peers, developing a road map for growth can be greatly enhanced by leveraging the successes (and failures) of your peers.
What level of penetration has your company achieved with a Purchasing Card program? Are you using one card for travel and miscellaneous purchases, or are you using different card products? How do you evaluate your current state, and what are your plans for the future?
Who are your peers and how are you collaborating with them?
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to 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.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.