Procurement Cards Issued to Users
One tool or system that most organizations agree is central to improving the purchasing process is the use of the procurement card, which is essentially a credit card provided to internal users. When users have a lower-value requirement, they simply contact a supplier and use the card to make the purchase. Cards work well for items that do not have established suppliers or are not covered by some other purchasing system. The users make the buying decisions (the money for which comes out of their department’s budget) and bypass purchasing completely. The dollar value of the items covered by procurement cards is relatively low. The cost to involve purchasing or engage in a comprehensive supplier search would likely outweigh the cost of the item.
The study by Trent and Kolchin found that the average cost per transaction due to procurement card use decreased from over $80 to under $30. The primary benefits from using cards include faster response to user needs, reduced transaction costs, and reduced total transaction time. In most organizations, purchasing is responsible for introducing and maintaining the card program.