In what two areas do organizations often face challenges? During my recent interview with Dr. Palmer, RPMG Research, about their 2014 Purchasing Card study results, two hot topics were controls and supplier acceptance of card payments. Both could contribute to a plateau in card use; as he explained:
- a constant reconsideration of how to exercise appropriate control over spending causes changes in the policies, procedures, and practices related to card use
- the desire to use cards often runs ahead of supplier acceptance in the market
What can we do about these issues to avoid a plateau and increase the value of P-Card programs? Below are more observations plus suggestions from Dr. Palmer.
Controls
Organizations reflexively move toward a “belt and suspenders” concept of control that is both unnecessary and inefficient. Program managers need to be thought leaders who work with, and enlist the support of, other thoughtful associates in the finance function to construct the right blend of controls for card-based procurement. In an era of constrained resources, one should be able to make a compelling case for the technology-enabled controlled growth of P-Card spending.
See related blog post on how to reassure management about your P-Card controls.
Ensure your P-Card program offers the greatest value at the lowest cost. Follow best practices, including those pertaining to controls and working with your suppliers.
Supplier Acceptance
It is very important, particularly in the “business-to-business” segment of the market, that card issuers and card-using organizations quantify and educate suppliers on the beneficial aspects of acceptance. Absent a clear demonstration of value and education, suppliers will focus on the costs of card acceptance and remain unaware of, or ignore, the benefits. Articulating and measuring the benefits will insure an open and honest discussion.
With respect to the level of supplier enablement, we did find that “best practice” organizations were more likely to have requested and obtained the support of their card issuer in expanding card acceptance.
See related blog post by AOC Solutions, including a quote from Recharged Education, about raising the bar on supplier enrollment in regard to electronic accounts payable (EAP).
Learn More
Read the two-page interview with Dr. Palmer in which he also describes key opportunities for the majority of organizations, including EAP, and shares what keeps RPMG motivated to conduct the industry studies.
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…