Make P-Card Usage Easier

There are many ways to improve a Purchasing Card program, but one answer is ensure the cards are easy to use. Satisfied cardholders (and managers) translate into support that can move your program to the next level. To determine whether your program is causing cardholders unnecessary pain, below are various elements to assess. 

Related Resources

• Making P-Cards easier to manage

• Card program management and growth

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Allowed and Prohibited Purchases

Do your program policies center on everything cardholders should not purchase? It is not uncommon for policies to consume an entire page outlining what is prohibited, but, for allowed purchases, there is often only a brief mention of the card’s per-purchase limit. This is discouraging and it leads cardholders to a dead end. No one will want to use their card and, given all the restrictions, they might be afraid of making a mistake.

First, it might be time for your organization to expand allowable purchases and/or limits. However, either way, make it enticing to use the card by describing the benefits. Be specific about the targeted purchases, helping cardholders easily see what they can and should do. Further, for prohibited purchases, link to the correct process for the desired purchase.

Purchase-to-Pay Process

Consider the basis of P-Cards and the reasons your organization pursued a program. P-Cards are intended to simplify the purchase-to-pay (P2P) process, resulting in cost savings and efficiencies. Using a card to purchase necessary business goods and services should be the quickest and easiest option. If it isn’t, identify the pain points; for example:

Shopping Around for the Best Price

Some organizations direct their cardholders to ensure they are getting the best possible price for what they need—if the item is not already provided by an approved vendor. The intent is good, but is the benefit worth the cost? If a cardholder is shopping around for what will be a low-value purchase:

• Their time spent might exceed the order total.

• The amount saved might be insignificant; for example, spending $179 instead of $185 for an item

• They could get distracted in the process, thereby spending more time than what is necessary.

Using Amazon Business might help with the “best price quest,” but there could still be the distraction factor.

Pre-purchase Approvals

Are cardholders required to obtain pre-purchase approval for every purchase? While this might be needed for certain purchases, it creates more work and slows the process down. Does it really add value, especially for low-dollar transactions? The post-purchase review by managers, as well as independent transaction auditing, should catch any inappropriate purchases that violate program policies. Subsequently, the cardholder should be subject to consequences appropriate for the offense.

Declined Transactions

Are legitimate transactions being declined? Whether sporadic or chronic, this is another issue that creates more work for everyone (in addition to being frustrating) and slows the process down. The problem could be overly restrictive merchant category code (MCC) blocks and/or spend limits. Ensure controls align with P-Card goals and targeted purchases. If the problem boils down to the cardholder doing something wrong, more training could be needed.

An issue related to declined transactions is limit adjustments. If you need to temporarily raise a limit or unblock an MCC to accommodate a legitimate purchase, then do so as expeditiously as possible. If a cardholder needs to wait for their manager to provide approval to the card program manager (PM), then the P2P process is delayed again—sometimes right at the point of sale. In the interest of efficiency, if the purchase is allowed per program policies, then it makes more sense for the PM to instigate the necessary adjustment first and then email the cardholder’s manager, copying the cardholder.

Technology

Manual tasks can be painful. Ensure cardholders and managers have access to technology to help them more efficiently execute their responsibilities. Technology goes beyond transaction review functionality, but, sadly, some organizations still rely on printed statements and forms. Most technology solutions from the card issuers include a mobile option especially useful to managers who need to approve transactions on the go. Also explore whether receipt imaging is available to improve how supporting transaction documentation is handled.  

If your organization needs assistance with evaluating your program improvement opportunities, please submit a contact form. Recharged Education can help!