Where Do Best Practice P-Card Programs Go Next?

What do you do if your Purchasing Card program has already adopted the full range of best practices? Is it time for autopilot mode? I suppose this is an option, but it would be contrary to the spirit of best-in-class programs and the conscientious professionals who led the way. Instead, take your program to the next level. That’s right. Another level is always possible. It is what makes P-Card program management both challenging and enticing. The necessary foundation for program optimization is there. You just have to go for it. Following are five ways to achieve a new level of greatness.

Beyond Best Practices

1. Conduct a Satisfaction Survey

Your program might look good on paper, but are the participants happy? Is there something you can do to maximize their satisfaction? For example, maybe improving the readability of the policies and procedures manual would be a welcomed change that leads to greater card utilization.

2. Address the Problematic People

P-Card best practices do not necessarily fix people. There will always be challenging cardholders, managers, and/or others (e.g., AP). Perhaps they would benefit from some one-on-one attention. Help them reach peak performance in their card program role. See more on cardholder management.

3. Improve Program Management Efficiency

Besides people, what still drains your time? If, despite following best practices, the majority of your time is spent on program operations (versus program strategy/growth), then something is not quite right. For instance, are you generating and distributing reports each month that are not used for any particular purpose? What can be eliminated, scaled back, changed, or automated? What does not add value?

4. Pursue Expansion Opportunities

This is an obvious option and, chances are, you have already identified the opportunities. Put an action plan into motion. Expansion means more: more cardholders, more card types, more card-accepting suppliers, and/or more allowed purchases—anything that increases spend or transaction volume.

5. Increase Program Visibility

This is a broad avenue to explore. Look further than the best practice of regularly sharing P-Card program metrics. Take the initiative to become aware of internal pain points that P-Cards could address. In my program management days, I was able to help my IT contact resolve a need related to tracking fixed assets. Since P-Cards were used to purchase the assets, the related data came in handy for his purposes. A more structured approach would be to participate on any internal committees or work groups pertaining to procure-to-pay processes.

Final Thoughts

Even if you opt for autopilot over the noted possibilities, someone might come along who messes up your perfectly performing program. Too often, program managers encounter a new executive with old ways of thinking. You find yourself being pushed backward and having to fight to retain the best practices you worked so hard to achieve. In these cases, “same level” can be just as rewarding as “next level.” Perseverance is a good quality to have when managing a card program.

See additional resources on P-Card program management and growth.

Where will you take the card program next?

Where will you take the card program next?



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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

A winning program goal strategy.

Has your organization reviewed its Commercial Card goals lately? Goals are a fundamental part of a card program, yet many organizations fall short in terms of goal setting and/or monitoring. Using my past experience as an example, the P-Card program that I managed was successful in many ways. For instance, it had executive buy-in and policies that allowed card usage for just about everything. We cruised along. Yet, for years we failed to: 1) research what our program could have captured and 2) subsequently develop specific goals derived from our overall B2B payments. As a result, we did not know what we were missing. Is this true of your organization? Where does your program stand in relation to goals? Following are five questions to help you assess your program goals, plus three additional action items critical for success. 

Assess Your Program Goals

Optimally, you will be able to answer “yes” to each question below.

  1. Are the goals measurable? Common program goals pertain to annual card spend and the number of transactions, process savings, invoice reduction within AP, changes to the number of full-time equivalents (FTEs) within AP and/or procurement, the number of suppliers converted to card payments, revenue sharing incentives, etc.
  2. Are the goals still relevant? While it is common to document goals when first implementing a card program, some organizations do not create new ones as the initial goals are surpassed.  
  3. Has your organization evaluated its B2B payments in recent years, especially its check payments, to identify the current potential for Commercial Cards? Engage with your card issuer to determine which suppliers accept cards and then prioritize the suppliers to target. 
  4. Are goals reasonable/achievable, based on research of your B2B payments? You cannot randomly aspire to spend $25M via cards if your annual B2B payments are only $20M. It is also not realistic to expect a 100% conversion rate from checks to cards.  
  5. Do your card limits support program goals? For example, if Commercial Cards are the preferred payment method, then spend limits should be generous enough to accommodate such a goal. 
In sports, a game plan guides the play of the team or individual. In card programs, quantifiable goals serve as a guide for program management, helping to drive optimal performance.

In sports, a game plan guides the play of the team or individual. In card programs, quantifiable goals serve as a guide for program management, helping to drive optimal performance.

Beyond Goal Setting

Goals remain incomplete until you do the following.

  • Create and follow an action plan for achieving the goals. Reviewing card limits is just one element. Ideally, the program manager, AP, and procurement will work together to build a structure for card program success. On a related note, see actions to increase card payments
  • Track and communicate the progress. This could also include highlighting the cost of any missed opportunities.
  • Adjust as needed. If your progress toward goals is slow or has stalled, identify the hurdles and what will move your program forward more quickly.

If your organization does all three of these things, you are at the top of your game. However, if you would like assistance with anything in the realm of card program goals, contact Recharged Education


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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Cards are king for one city.

This fact is astounding: The City of Lenexa (Kansas) uses traditional P-Cards for more than 70% of its business-to-business (B2B) payments. How have they done it? What are their future plans? My interview with Dana Simms, Senior Accountant, follows. It demonstrates the value of organization-wide support, patience, and perseverance. 

Keys to Success

Q: To what do you attribute such great success?

A: One, the support of our management team. Without their support and backing, there would be no motivation among city staff to use Purchasing Cards. Two, employees appreciate the ability to make purchases they need when needed. Employees do not want to process a requisition or a check request and wait two days to maybe two weeks for a check to make the purchase. Three, the implementation of select ghost accounts. We have established ghost accounts for Verizon, the Information Technology department, and the Finance department. These two departments can pay invoices on a Purchasing Card that may be over the normal card limits, which are $2,500 per transaction and $5,000 per month.

Editorial note: Some end-user organizations, like the City of Lenexa, have proven that traditional ghost accounts work for them. These accounts, with limits that refresh each month/cycle, function like a regular P-Card. However, common drawbacks include lack of dispute rights and difficulty identifying or enforcing accountability since the account is not issued to a particular employee. An organization should discuss the pros and cons of ghost accounts with its card provider.

Q: What do you think are unique characteristics of Lenexa (regarding your card program) compared to other cities or even other organizations?

A: Our management team and governing body have always been progressive with their thinking and actions.  If something makes sense, saving time and money, then they are eager to take advantage of the opportunity.

Early Challenges

Q: What were some of your biggest challenges to overcome to get Lenexa to where it is at today?

A: The biggest challenge was getting the employees to use their cards at the point of purchase. It was easier for them to place a purchase on a house account and/or have the vendor invoice the City. The first step was to close all house accounts. Then, if an invoice was entered for payment, we contacted the employee (purchaser) and asked them to place it on their purchasing card. It only took a few times of returning invoices to employees for them to realize the payment process was easier via card.

Editorial note: Access a previous blog post that addresses the importance of ensuring cards are easy to use and three key elements to assess in this quest.

With the right support, cards can emerge as the focal piece of your payment strategy.

With the right support, cards can emerge as the focal piece of your payment strategy.

Current Challenges

Q: What are your biggest card program challenges now?

A: Two things, both of which pertain to vendors and card acceptance. Some vendors want to add a surcharge to accept purchasing cards. Kansas has a “no surcharges” law, but there really are not any enforcement processes in place. If a vendor applies a surcharge, we attempt to contact them. Another challenge is the card acceptance fee. Some vendors are willing to absorb the fees on small-dollar items, but not on bigger items such as construction or equipment/vehicles.

Editorial note: The merchant ID and physical business address for that ID determines whether surcharging is permissible. In other words, a merchant abides by the laws in the merchant’s state, regardless of the laws in other states to which the merchant ships goods or in which it provides services. See more on surcharging...

Current/Future Plans

Q: Where does Lenexa plan to go from here? Perhaps you just want to maintain your current level.

A: We would like to continue to grow the program. Employee and vendor education, along with monitoring purchases, are big factors in being able to do this.

Final Thoughts

The City of Lenexa has the right idea. When you have achieved a high level of card success, do not simply stop. Continue to look for new opportunities.

Another thing to focus on is program management and the elements that could be improved. What are your pain points? Could your policies and procedures be revitalized? Could you expand or refine the training program? What about purchase-to-pay efficiencies?

If your organization would like assistance with any program improvement endeavors, submit a contact form to learn how Recharged Education can help. 

 


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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