Who should have a card?

The procurement card is designed to manage the high volume of low value, often repetitive, purchases made on a daily basis. The most common areas of usage are stationery, laboratory consumables etc and other requirements where there is an on-line ordering facility.  Likewise, they may be used for ad hoc purchases from suppliers that can accept payment using a credit card.  The use of the card has the benefit of reducing the administrative costs of creating new suppliers on the institution’s financial system or generating, one-off, manual cheque payments.

Procurement cards should be targeted at staff involved in the day-to-day purchasing activity within the department and not necessarily the Head of Department.  Where there are lead, or nominated, buyers in place, it is they that would benefit most from having access to a procurement card. Analysing current spend transactions to highlight the suppliers creating the highest volume of low value transactions will help identify who would benefit the most from being given a card.

Using a procurement card replaces the need to create and issue a purchase order to the supplier and, later, to authorised and physically pay the supplier.  It is this reduction in the manual processing of paper orders and invoices that makes the use of the card attractive. 

It should be noted however that the introduction of a procurement card does not negate the need for work altogether. There is a need to maintain a detailed transaction log (recording all transactions) and then, later, to reconcile the log with the bank statement. In addition, documentation (delivery notes etc) must be retained with the log to provide an audit trail.

One area where the card is very useful is where there is a need to make a pre-payment for goods (for example, when purchasing software).  The use of the procurement card provides protections similar to your personal credit card and, in the event that the supplier fails to supply the ordered goods or they are faulty, the institution will be able to claim a rebate from the bank operating the procurement card.  The card provider will then resolve the issue with the supplier.