ProcurementCard.jpgAccording to the latest available research South Africa still lags, and considerably so, the UK and USA in adopting the Purchasing Card (P-Card) as a preferred tool for managing several expenditure categories such as maintenance, repair and overhaul, travel and entertainment. This is despite the fact that the P-Card has proven to be a boon for early adopters in terms of both increased process efficiencies and cost savings.

In the USA many of the Fortune Top 500 companies have a P-Card in place, while in the UK all tiers of government have been adopting and implementing a card payment solution.

What then are the challenges, issues and the stumbling blocks that the procurement officer considers in the planning stage of a card solution? Nedbank Corporate Card‘s Kgomotso Ntsimane says the following are taken into account:

  • Audit – the organisation is obviously concerned with proper accounting of all expenditure under management and must be convinced that P-Card reporting is system-friendly.
  • Enterprise resource planning systems – these usually powerful systems need to be integrated with the P-Card and another or third-party interface may be required. The question is: What is available and suitable?
  • Finance – the focus is on managing risk and there are still issues that linger in many minds regarding card misuse and the misappropriation of funds by cardholders.
  • Information technology – mistrust may stem from circumstances under which P-Card statements are generated and from statements being managed externally or ‘out of system’ at the first level, requiring reconciliation of all items back into the company’s internal controls.
  • Purchasing controls – the Chief Procurement Officer will need convincing that cardholders are restricted to their business mandate.
  • Suppliers – While the P-Card is designed to increase the efficiency of early settlement of supplier invoices, suppliers often balk at footing the bill by way of the merchant fee that is deducted upfront.
  • Track record – New prospects require proof that the P-Card solution on offer comes with evidence of successful implementations elsewhere.

SmartProcurement is aware of several large implementations in both the financial services and tertiary education sectors in South Africa where, at one university for example, more than 650 P-Card users are authorised, with a managed spend of over of R2-million a month.

 

For P-Card solutions talk to Nedbank Corporate Card.

 

P-Card solutions will be in the spotlight at the upcoming SmartProcurement P2P Professional Forum being held in Centurion on 10 July 2013.