Purchasing cards (P-cards) have almost been universally adopted as a preferred payment mechanism for low value goods. P-cards provide greater control and productivity than traditional processes. Yet significant challenges remain.

Credit card purchase data remains separate from the accounts payable data. Cultural resistance to the expansion of the P-card program exists. The P-card program is seen as a Finance solution and not part of the Procurement process. Supplier adoption to P-cards (particularly level 2 and 3 data) is constrained. No appropriate electronic payment solution yet exists for higher value goods and services.

The Procurement Exchange can help

The Procurement Exchange assists organizations with the following services.

• Procuring a new purchasing card provider;
• Optimizing use of existing purchasing cards, including improved control mechanisms and management;
• Integration of electronic payment mechanisms (e.g., purchasing cards) into existing ERP systems;
• Assessment of electronic payment alternatives (e.g., electronic invoice presentment and payment); and
• Supplier consultations to identify new opportunities for implementing cost savings ideas such as preferred payment terms or purchasing card acceptance;

If you need assistance with any of these challenges, The Procurement Exchange can help. Simply contact us to let us know your requirements.

Quick tips for mproving the payment activity

Tip 1 - Consult with your supplier base to establish preferred payment terms (e.g., 2/10/net/30) as the default payment structure with suppliers.

Tip 2 - Integrate your p-card data into your accounts payable solution in order to improve the management of the program.

Tip 3 - Consult with your issuing bank about establishing a virtual card payment mechanism within your accounts payable system in order to improve payment productivity.

Tip 4 - Identify the source of and seek to eliminate all errors in the payment processing cycles.

Tip 5 - Set performance targets for the proportion of payments done electronically and error free.

Tip 6 - Actively manage your supplier data and set targets for achieving Level 2 or 3 data from your supplier base.