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Purchasing Card Program Implementation

Program Implementation Overview

 
The success of a Purchasing Card (P‑Card) program begins with thorough planning long before an organization conducts a request for proposal (RFP) process to select a card issuer.

 

Getting Started

 A P-Card initiative typically begins with senior management, whose support is critical from the start. A team approach to researching the P‑Card opportunity, followed by the creation of a business case that offers an appropriate level of detail and data, should lead management to a decision concerning a P‑Card program. The team should include representatives from key stakeholder departments, such as purchasing, accounts payable (A/P), audit, tax, treasury, etc.

The research phase addresses questions such as:

  • What procure-to-pay processes are used today?
  • What are the inefficiencies?
  • What is the average process cost for the traditional process? What might it be for P-Card?
  • What percentage of A/P payments are less than $2,500 (as an example) and well-suited for P-Card?
  • How many infrequently used suppliers are in the master supplier file?
  • If x% of payments move to P-Card, what is the impact (e.g., workload reduction) to A/P and purchasing?

To reap the greatest benefits from a P-Card program, an organization must re-engineer its procure-to-pay processes rather than simply add P‑Card processing to existing procedures.

The Business Case

Based on the team’s research, the business case should illustrate the anticipated savings and benefits; outline potential challenges, risks and mitigating controls; identify the required resources; propose a recommendation; and so on.

 

Developing the P-Card Model

 At a high level, this involves tasks such as: creating program goals and metrics; identifying targeted transactions; defining program roles and responsibilities; documenting program requirements, especially those related to information technology (IT) and interfaces to the general ledger; and designing the control environment.

 

When determining how and when P-Cards should be used, an organization should evaluate its overall purchasing activity first. This would be followed by determining the best procure-to-pay process for different expense/purchase types, ensuring a "win-win" for the organization and its suppliers.

 

Similar to an end-user organization, suppliers need to re-engineer processes to maximize the benefits of card acceptance by:

  • gaining an understanding of the Purchasing Card process and its opportunities
  • selecting an acquiring partner with expertise in business-to-business (B2B) payments
  • implementing appropriate processes and technology
  • working closely with their customers to establish standard policies and procedures  

Piloting the Program 

A pilot program that effectively tests the P-Card model will provide the foundation from which to build a long-term program, revealing gaps and issues that must be addressed prior to full program rollout. In addition to the recommendations described above, it is important to have a strong, internal communications strategy plus a dedicated resource to manage and support the program.  


 Become an NAPCP member or complimentary subscriber to gain greater access to educational resources, including more on program implementation; participate in polls and surveys; and receive P-Card news and event notifications.

Visit the P-Card Introduction page for more resources

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News
Event Calendar

9/24/2019
Educational Webinar: Helping Providers Link Clients to Industry Education and Resources

9/24/2019
NAPCP Commercial Card Regional Forum, Minneapolis, MN

9/25/2019
Educational Webinar: Payment Strategies: Driving Costs Out and Bringing Revenue In

10/8/2019
Virtual Demonstration: Supplier Payments Insights that Unlock Your P2P Strategy

10/9/2019
NAPCP Commercial Card Regional Forum, Toronto, ON

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Certified Purchasing Card Professional Credential 
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