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last updated: 3rd August 2011

The procurement card has the facility to set individual and monthly transaction limits. The purpose of this is to help control the use of the card, by limiting its use to low value transactions.

In practice, the value set for the individual and monthly transaction levels should reflect the expenditure patterns of the card holder’s department.  For example, where the card is used to manage an area’s stationery requirements, low limits of, say, £100 and £500 will be adequate. In other instances, a £500 or even £1,000 individual transaction limit may be appropriate with a suitable higher level for the monthly limit.

The individual transaction limit can be increased for an agreed time period to deal with a specific requirement. Thus, in practice, the financial limits should be set to handle the majority of the card holder area’s requirements and not to cope with the occasional high value requirement.  In practice, the central Procurement Office will have higher transaction levels and can, if necessary, manage the payment on behalf of the department (once it has received the appropriate instruction and authorisation to make the purchase).

Likewise, users should be discouraged from splitting orders simply to be able to use the procurement card rather than a conventional order.  It is important to consider the value for money aspects of generating lots of low value transactions instead of aggregating requirements into more sensible orders.  A good example here is where a department first gets a procurement card and tends to place lots of small orders simply because it can. The user should consider the ‘unseen’ costs of the supplier making multiple deliveries, for example, there may be post and packaging costs with every order or the supplier’s delivery van is making more journeys than would be necessary.  When the supplier is reviewing the contract, they will see your institution as a high-cost customer and this will be reflected in future pricing structures.
 

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