Procurement Cards

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Procurement Cards
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Background

• Designed to provide efficient, cost effective
  method of purchasing and paying for small dollar
  (goods less than 500), repetitive purchases
• Alternative to traditional purchasing process and
  can be used in lieu of a purchase order, check
  request, petty cash, or staff reimbursement
• Does not replace bidding and contracts

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Primary Benefits

• Lower overall transaction processing cost per
  purchase
• Industry estimates PO at 125-175 P-card
  transaction average 25-40
• Increased management information on purchasing
  histories
• Time savings resulting from reduced paperwork
• Fraud prevention protection

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Primary Benefits (contd)

• The ability to set and control purchasing dollar
  limits, including shutdown of card
• Potential revenue from card usage rebates
• Accounts Payable efficiencies
• One monthly payment vs. multiple payments to
  multiple vendors

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Secondary Benefits

• Staff convenience of purchasing without a PO
  (within established guidelines)
• Expedited delivery of goods payment to vendors
• Expanded list of merchants from whom approved
  purchases can be made (i.e. online,
  registrations, travel)

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Typical Purchasing Process
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Streamlined Process Using Purchase Card
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Controls

• Policies and procedures
• User agreement signed by each cardholder
• Spending and transaction limits

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Controls (contd)

• Existing pre-approvals still required
• Specific guidelines for appropriate use of
  purchase cards
• Detailed procedures for issuance and cancellation

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Controls (contd)

• Recordkeeping requirements, including review and
  approval processes
• Periodic audits of card activity and retention of
  sales receipt and documentation of purchases
• Segregation of duties for payment, accounting and
  reconciliations

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Questions?