Adopting procurement cards? Work from the bottom up
When Anita Carolus, Nedbank Corporate Card National Sales Manager, speaks to clients about setting up a procurement card programme, the inevitable question arises: ‘Where do we start?"
A good way of looking at this is from the bottom up, she says.
Most companies have a procurement policy under which major suppliers will be loaded onto their enterprise resource planning (ERP) system for payment purposes. “This makes sense for suppliers who issue invoices for significant amounts and are regular suppliers to a company.”
However, Carolus suggests looking at the smaller, more irregular purchases that a company might make.
There are often cases where suppliers who are not on a company’s books are required to do work on an ad hoc basis. However, while there is also only a slight chance that work will need to be done by the same supplier in the future, an invoice would be processed each an every time.
Typical invoice processing is lengthy and costly, and is generally not measured and understood in terms of the total costs of the process. But a procurement card programme can address these management shortcomings in infrequent transactions.”
Research done by the Aberdeen Group has shown that procurement cards are used in the following categories of spend:
• Maintenance, repair, and operations (MRO)
• Professional services
• Computer hardware and services
• Freight and courier services
• Temporary help
Carolus usually suggests to her clients that they pick just one of these categories and run a limited pilot to prove to management how procurement cards work. “Keeping it small in the beginning is a great way of managing the implementation of procurement cards and the change in the payment process.”
Once the cards have been set up and used for a few months, clients can expand the programme to include other areas in the same category of spend.
For more information on managing your lower value and infrequent spend with a procurement card programme, contact Anita Carolus at AnitaCa@Nedbank.co.za.
At the Purchasing Cards Professional Forum on 10 July 2013 in Centurion you will hear from Linda Harrower, Liaison Manager, Procurement & Payment Services, how the University of Cape Town has grown their card programme to over 650 users. She will shed light on the many challenges and value-add successes during implementation and inform you how to avoid the pitfalls.
To register for this hands-on workshop simply call 0861 334 326 or e-mail firstname.lastname@example.org.