A procurement card differs from a credit card
How does a procurement card differ from a company credit card or a charge card? Anita Carolus, Nedbank Corporate Card National Sales Manager, explains in this month’s SmartProcurement.
Even though procurement cards are physical pieces of plastic that allow spend, they are different from credit cards in many key aspects:
• Procurement cards simplify low-value, high-volume transactions and reduce paperwork and processing time.
• Procurement cards have added controls such as spend limits and merchant category code blocking, which curb unnecessary spend and prevent spend at unauthorised merchants.
• Procurement card data is exceptional, as it has up to third-level data (the same information usually displayed on an invoice or a till slip, e.g. a description of goods bought, quantity, amount paid and tax paid). This data provides more details of the company’s spend and will highlight inconsistencies and wasteful spend, which can then be dealt with through disciplinary steps as set out in the company’s policies.
• Using procurement cards can dramatically reduce the administration cost of small purchases for a company, as one does not have to go through the traditional P2P process.
• Reconciliation is made easier with procurement cards because the data can be integrated into the company’s ERP system seamlessly with a data feed.
Governments worldwide are under constant pressure regarding the spending of taxpayers’ money in a very volatile environment where fraud and wasteful spend is a reality. Many governments are, however, seeing the benefits of procurement card programmes and many are now adopting these in place of traditional credit card programmes. Governments using procurement cards include several in the United States, the United Kingdom and other European countries, the Philippines and Australia.
For more information on what a procurement card programme can do for your company contact Anita Carolus at AnitaCa@Nedbank.co.za.