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CITY UNIVERSITY
INVESTIGATION INTO THE VIABILITY OF PURCHASING CARDS 1. Purchasing cards are a tool to reduce process costs of transactional
purchasing.
2. The majority of the University’s invoice payments are under £250, and most suppliers to
the University receive less than £500 per annum. This type of expenditure can be
categorised as ‘Tactical Acquisition’ (low value; low risk), a prime area for purchasing
cards.
3. Calculations using certain assumptions about the processes involved in making
purchases indicate process costs of over £22 for conventional orders, £17 for orders
placed using the SAP system, and approximately £10 for purchasing card transactions. It
should be noted that these are efficiency gains which are unlikely to translate into bottomline
savings.