Does your organisation qualify for procurement card benefits?
“In my experience the best explanation is an example of what happens when a procurement card (P-Card) is NOT used,” says Anita Carolus, Nedbank Corporate Card National Sales Manager, in this month’s SmartProcurement.
One of Carolus’s clients is the Limnology (Freshwater Science) Department of a university. This research department is headed by an emeritus professor with a team of four researchers. Their 2013 research focuses on marine and freshwater mixing zones around South Africa for which their research budget is R900 000. With these funds the researchers need to purchase all their equipment, visit each estuary around South Africa, collect water samples and send them for analysis, and then compile the results in a research report.
The professor is required to manage his research funds and to report to his donors in order to receive further funding. Before introducing P-Cards, control over and visibility of spend was limited, also, the professor’s team often did not fully utilise the fund, which meant that in the next financial year he did not receive the same level of funding…
Complications were introduced by the fact often the professor funded his research out of his own pocket and then claimed this back from the university, which is, more often than not, a process-heavy task. The administrative burden of returning the funds resulted in the professor having to wait for weeks or months for his refund, promoting a reluctance to use the fund.
Carolus explains how a P-Card system streamlined the whole process. “With the P-Card, the research funds can be allocated to the different research areas and a number of cards can be issued to approved fund users. The correct controls are put in place to ensure that P-Cards are not abused and complete visibility ensures compliance with the University’s purchasing policies. With the procurement card solution the professor tracks and manages his own spend and, with a consolidated monthly statement, he manages each of the cards in his area. Lastly, through a consolidated card statement the university pays the procurement card bill and then allocates funds from the various research areas, making the management of the research funds an easy and seamless task.
The Business Case for implementing a Purchasing Card solution will once again be in the spotlight at the upcoming P2P Professional Forum, a 3-hour event being held on Wednesday 20th November 2013 at the Atlantic Imbizo, V & A Waterfront, Cape Town. To register contact email@example.com.
For more information on how your company can benefit from a P-Card solution contact Anita Carolus at AnitaCa@Nedbank.co.za.