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Economy


Purchasing with plastic

Purchasing with plastic

County uses cards for inexpensive items, tracks spending online.
  • Written by American City & County Administrator
  • 1st March 2005

The Fairfax County, Va., Purchasing and Supply Management Department rolled out a Web-based software program this year to help the county’s 50-plus agencies and departments manage expenses made with their purchasing cards. The software allows department managers to generate card activity reports and reconcile accounts frequently.

Fairfax County steadily has been replacing its traditional small purchase requisition method with purchasing cards from Master-Card, based in Purchase, N.Y., since 1999. Starting with about 50 cards, the purchasing card program in the county has grown to include almost 1,100 cards, which typically are issued to the departments and shared by employees. One person in each department is responsible for securing the cards, and employees check out cards when they need them and log their purchases and receipts when they return them. “We don’t need as many purchasing cards because we’re sharing,” says Mary Jane Comly, management analyst for the Purchasing and Supply Management Department. “We also don’t have to reissue the cards as often.”

Since the county began using the cards, the Purchasing Department has used software to track card spending activity. Each week, the department received a centralized electronic billing file and changed the file into a format compatible with the county’s electronic financial system so that each purchasing card charge could be posted to the appropriate department account. The county’s Finance Department paid the bill weekly, based on the total amount of the central bill submitted to the Purchasing Department.

The Purchasing Department also received weekly spending reports for all cards, separated them and e-mailed them to the appropriate departments, which reconciled their reports against their spending records to assure that all charges were accurate. Although the desktop-based software allowed the Purchasing Department to view transaction data and run limited reports, the only access departments had to their spending data was the weekly e-mail report forwarded by the Purchasing Department.

In December 2004, the county moved purchasing card management from the old desktop-based software to a Web-based product provided by New York-based JPMorgan Chase and Golden, Colo.-based ProCard. The Web-based software, called Pathway Net, allows the Purchasing Department and card users to see card activity online almost immediately after the cards are used. The software also allows departments to create reports to manage and audit card spending.

Granting card data access to managers in each department has relieved the Purchasing Department of some administrative duties, such as resolving problems if merchants decline a card. “Before, if users got a decline on the card, they would call us, and we would call the bank,” Comly says. “Now the [department] manager can go into the software and can sometimes find out why the card was declined. They can tell the user, ‘You’re near your monthly limit. We’ll have to wait till next week to make that purchase.’ We get fewer phone calls for administration.”

For the last fiscal year, Fairfax County’s purchasing card volume reached $30 million, including $10 million solely for the Vehicle Services Department, which recently began using the purchasing cards to buy all vehicle parts from its contractor as well as some off-contract parts. Also, the county’s purchase order volume has decreased by about 33,000 in the last year and by 280,000 since 1999.

“We still have [the traditional purchase requisition process] in place, but it can be a lengthy process for low dollar value purchases,” Comly says. “When people need something right away, that traditional purchasing tool doesn’t respond well, but the purchasing card is instantaneous.”

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