4 benefits of P-Cards that drive strategic procurement
The days when procurement was merely another support function are long gone. Organisations are becoming more aware that procurement is vital to adding value for the company and its customers, and should, therefore, be part of the overall corporate strategy, explains Anita Carolus-Opperman, Nedbank Corporate Card National Sales Manager, in this month’s SmartProcurement.
P-Cards have found a niche in low-value, high-volume transactions, which can be a problem area in procurement as, often, the item purchased costs much less than the cost of processing purchase orders and invoices.
P-Cards have many benefits that will help shift these types of ad hoc purchases from traditional procurement to more strategic procurement, says Carolus-Opperman:
- More and more companies are adopting P-Cards to replace petty cash as the P-Card offers increased controls such as credit limits or prefunding, limiting transaction value and/or frequency, and specifying merchant- or industry-category spend.
- P-Cards reduce costs by streamlining procurement processes in that steps are removed from the traditional P2P process, and by eliminating inefficient paper processing.
- P-Cards are perfect for one-time vendor purchases as they allow companies to make a single payment to the bank, covering multiple vendors. The costly process of adding vendors to an ERP system can therefore be avoided.
- P-Cards provide up to third-level data, enabling companies to see where, how much and how often cardholders are spending. This level of visibility means companies are well positioned to negotiate better discounts on purchases and drive purchases through preferred or strategic suppliers.
It is clear that a P-Card is not just another payment tool, but rather a purchasing tool that will support the strategic procurement activities of the company and ensure that the procurement of non-critical and ad hoc items is as seamless as possible.
For more information on how a purchasing card programme can benefit your company contact Anita Carolus-Oppermanat AnitaCa@Nedbank.co.za.