Does the Procurement Team Care About Payments?

My answer to the above question is, “They should.” Yet, more than one person has recently told me that the procurement team limits their focus to supplier selection and negotiating low prices. They view payments as something accounts payable handles. Such thinking is narrow minded since payments begin with the terms and conditions in supplier contracts and purchase orders. Perhaps an interest in payments only surfaces when the procurement department manages the card program. However, whether they like it or not, “purchase” and “pay” go together. Following are things both management and procurement should do to contribute to organization success.

What Management Should Do

Regardless of which department administers the card program, management should demonstrate leadership by doing the following.

  • Clearly identify the roles and responsibilities of procurement and AP related to internal purchase-to-pay (P2P) processes.

  • Communicate their expectations for how the two departments should work together to effectively execute the organization’s P2P preferences.

  • Hold employees accountable.

  • Establish quantifiable goals for reducing check payments through increased card usage.

  • Support continuing education in the P2P space, directing employees to pursue topics that could help the organization more quickly achieve its goals.

What Procurement Should Do

Speaking from my experience as a former procurement person, the following actions help raise the profile of the department in a positive way.

  • Actively work toward exceeding management’s expectations. This could include proactively expanding the team’s knowledge about electronic payments, particularly Commercial Cards. Invite the card program manager to deliver related training to procurement staff.

  • Make it a standard operating procedure to address card acceptance in competitive bids and contracts.

  • Meet with each internal “buying department” on a regular basis to: discuss that department’s suppliers and the applicable P2P process, inquire about competitive bids that need to be done, and educate them about the organization’s card program.

  • Monitor adherence to contract terms concerning payments. If there is a problem, respectfully work with the buying department, AP, and/or the supplier to get things back on track.

Final Thoughts

Even if management does not take the initiative to unite procurement and AP, these two departments should take it upon themselves to work together on P2P processes. Driving organization success means department and employee success.

Related Content

Does procurement care about payments? The answer should be a firm “Yes.” If not, take the appropriate steps to get them on board.

Does procurement care about payments? The answer should be a firm “Yes.” If not, take the appropriate steps to get them on board.



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About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

The People Part of the P-Card Training Equation

When revising your P-Card training and considering the needs of trainees, look further than just their job titles. Drill down to some specific characteristics that can impact which training approaches you decide to implement. The other “people part” of the equation is the trainer. Assigning this role to the P-Card program manager or administrator is not the only option. At the 22nd National Cards and Payments on Campus Conference earlier this year, breakout session speaker Helen Kubiak, CPCP, from Lone Star College addressed a wide range of P-Card training aspects. Below, I am sharing her tips related to both trainees and trainers, including what to prepare for that you might not expect. Giving more thought to the “who” portion of a training plan improves the chances of everyone having a positive experience.

Who Will Be Trained?

We know that mandating training for cardholders and managers is a best practice, but, as Helen stressed during her conference session, one size does not fit all. I completely agree. Beyond job titles, cardholders and managers alike will possess different attitudes, computer skills, training preferences, etc. Helen recommends asking trainees what they need and then responding accordingly. For example, senior-level cardholders may want one-on-one training in the privacy of their office. Others might feel most comfortable with online, on-demand training.

When it comes to classroom training on the technology they will use, avoid mixing computer novices with those who are computer fluent. If they are together, the pace will either be too fast or too slow, and a portion of the audience will be frustrated. After the initial training, Helen endorses regularly offering open computer lab times with trainers on hand to help cardholders reconcile their transactions.

Finally, prepare for pushback. Helen described how a trainee once surprised her by asking, “I was hired to do X, so why do I have to do these administrative tasks?” In my career, I encountered pushback from a manager who thought P-Cards added work to his department. When I described the purchase-to-pay process with and without cards, he was able to see that P-Cards provided more benefits overall. In addition, I reiterated how the P-Card program was supported by senior management.

Who Should Deliver the Training?

As the subject matter expert (SME), the P-Card program manager or administrator (PM/PA) is a natural choice. They know the frequently asked questions and common P-Card situations to cover during training. However, an SME is not always the best trainer. They might know their stuff, but fail to engage an audience and/or not be comfortable in the role.

Some organizations centralize their internal training needs by having a designated training department cover a variety of topics. Would it make sense to add P-Card training to their list? Helen acknowledges that it can be hard for the PM/PA to relinquish the trainer role, but it could be worth evaluating if your organization has the capability. I think that this arrangement would work best for a virtual, on-demand platform. The PM/PA could provide a script that the trainer uses to create a polished, finished product. In a classroom setting, an organization trainer might not be equipped to answer detailed P-Card questions from trainees.

No matter who delivers the training, ensure they have the right skills, which might mean they should attend a class geared toward trainers. Even good trainers are susceptible to what Helen identifies as losing energy over time. She shared, “Sometimes when you think you’re in a groove [as a trainer], you’re really in a rut.” This can happen when a trainer is so familiar with the material that he or she goes into auto-pilot mode. You have to seek ways to keep the energy level up and the content fresh. Helen even suggests incorporating some humor into in-person training sessions when appropriate.

Final Thoughts

Motivated trainers who are willing to mix things up and cater to the needs of trainees will see a payoff for their efforts. During her session, Helen nicely summed up P-Card training by expressing, “Empowered (trained) employees contribute to program growth.” Absolutely!

See more training-related content from Recharged Education, including four attributes of effective training.

Giving more thought to the “who” portion of your P-Card training plan improves the chances of everyone having a positive experience.

Giving more thought to the “who” portion of your P-Card training plan improves the chances of everyone having a positive experience.



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About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

Survey Results Reveal P-Card Control Opportunities

If you assume that most organizations require cardholders and the “manager-approvers” to sign an internal agreement pertaining to their card program role and responsibilities, I have contrary news. According to a survey on internal controls conducted by AP Now at the end of 2018, only 29% of the respondents whose organizations have a card program follow the best practice of requiring both groups to sign such an agreement. These organizations represent all types and sizes, proving that best practices are accessible to everyone. Keep reading to see more about the survey results, including a surprising outcome concerning card limits and restrictions.

Internal Agreements

Most organizations only require cardholders to sign an internal agreement, but there are even some organizations that do not utilize one at all. If you do not have one, make it a priority to develop one. Further, ensure your organization is not overlooking the manager-approvers who are responsible for confirming that cardholders’ transactions comply with program policies and procedures. Requiring them sign an internal agreement helps reinforce accountability for their role.

See more about internal agreements, including sample statements to include.

Card Controls

The survey by AP Now, which pertained to all sorts of AP-related controls—not just cards, also explored card controls like spend limits. Respondents were directed to check which ones—from a list of six—they apply to all or most cards. As shown in the graph below, it is very common to utilize a monthly/cycle spend limit, but the results for the other controls are lower than what I expected. Hence, there is ample opportunity here.

Card Controls Utilized_AP Now.JPG

Approximately one-third of respondents’ organizations only apply one or two of the above card controls to all or most employees’ cards. While I always try to steer end-user organizations away from being overly restrictive (to prevent declines of legitimate transactions and encourage card usage), I do recommend taking advantage of what is available. The key is to strike the right balance, aligning card controls with program goals. At a minimum, besides utilizing a monthly/cycle spend limit, organizations should block “high risk” merchant category codes (MCCs), including automated teller machines (ATMs).

Final Thoughts

Internal agreements and card controls are basic components of a program that help deter fraud. I have to wonder if the organizations that fall a bit short in these areas made conscious decisions about them or whether they simply got overlooked. The good news is both are easy to act on and improve.

If you are concerned about potential control gaps within your program, consider attending the three-hour virtual workshop on P-Card risk assessments June 25, hosted by AP Now.

Help your card program withstand the elements that could impede its success. Strengthen the protective controls.

Help your card program withstand the elements that could impede its success. Strengthen the protective controls.



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About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more