While procurement card programmes have many noteworthy benefits, as outlined in previous SmartProcurement articles, ultimately their role is to save you money, says Anita Carolus, Nedbank Corporate Card National Sales Manager.
A procurement card programme helps lower costs in the following ways:
• Streamlining the P2P process. One of Carolus’s big university clients has seen a 65% improvement in its P2P process, going from 14 steps to only three, which also saves on man hours. With the streamlined process a company can save on the cost of processing a single transaction by as much as 76%. After doing an assessment of its procurement costs one government department realised it was spending R730 to obtain a padlock worth R9,80; clearly showing that there is room for improvement.
• Implementing effective spend control. The extra controls put in place on a procurement card programme prevent wasteful spending by ensuring that funds are spent according to policy.
• Reducing cycle time. The Purchasing Card Spend Benchmark Survey showed that the use of a procurement card saves, on average, 72% in cycle time, going from almost 20 days to less than five days.
These are just some of the reasons why South Africa is fast playing catchup with the UK and USA, where most companies and government have procurement card programmes in place, says Carolus. Some of the US government bodies have reported savings of more than $100-million dollar a year.
How does this information relate to the South African government? Carolus explains that with all these possible savings there will be less strain on taxpayers and the government will have more funds to spend on priority objectives such as job creation, education, health, fighting crime and rural development.
For more information on the cost-saving benefits that come with introducing a procurement card programme contact Anita Carolus at AnitaCa@Nedbank.co.za. SmartProcurement is hosting a workshop on the business case for purchasing cards in the P2P environment on 2 April 2014.