Parenting your P-card program
You have probably never thought of your purchasing card program in these terms, but a good P-card program is akin to a good parent-child relationship. The rewards are tremendous for a successful program, but it requires a strong foundation, nurturing, discipline, patience and your own unwavering belief.
When the program begins, you may feel overwhelmed by all the unknowns. The decisions are numerous, the attention it requires is constant, and concerns run rampant around you. Your unconditional conviction that the improved process efficiencies, increased rebates and other benefits to your agency make every aspect worthwhile is not readily apparent to everyone looking in from the outside or viewing it in its infancy. But you know the potential, don’t you?
Often, when beginning to implement a P-card program, there is so much fear. There is fear of misuse and fraud, fear of the program not taking off at all with efforts and funds being wasted, fear that if it does not succeed, you as the “parent” will be to blame.
So, what can you do to establish a strong foundation and continue to nurture and grow your program to create an independent, successful, valuable, and well-respected P-card program? It is no secret that lack of visibility, compliance and controls result in costly leakage, misuse and unrealized savings.
The next page includes best practices for improving your P-card program to achieve increased governance, rebates and savings.
Each of the best practices has critical importance depending upon the phase and state of your P-card program. When your program is first created, you have to make sure the foundation is in place and the basics are taught. That includes dissemination of information and inclusion of stakeholders to establish proper involvement and understanding. Foster a culture of participation, knowledge-sharing and responsibility.
Paramount to success are clearly defined and readily available and understood policies and procedures. And, just like with a child, consequences must be taught and enforced. If the penalties are defined but not applied, then cardholders are likely to push the boundaries and potentially cause problems for the agency and, ultimately, the entire P-card program.
A well-automated program will prevent issues and is invaluable in helping you, a P-card program parent, get proper rest and have balance. More automation eliminates fear of the unknown, provides electronic compliance to internal policy and external regulation, delivers a centralized readily available audit trail, allows for one-click approval and reconciliation, and substantially minimizes and eliminates misuse, all of which directly contribute to increased rebate and cost savings.
As the program grows, use metrics to compare your program to others. Is your program at the stage it should be? If it is behind, what can be done to help it catch up with its peers?
Many purchasing professionals before you have accomplished positive rewarding results from P-card programs. Learn from their mistakes, their wins, their processes and you will reap the rewards. Your P-card program can grow from an infant to a valuable adult, but you must take responsibility for creating a strong foundation and provide constant, unwavering nurturing into adulthood.
Debbie Hamel is President & CEO of Reston, Va.-based TakeCharge Technologies.
10 Best Practices for Improving Your P-card Program
Best Practice #1 – Stakeholders: Communicate up, down and across
Best Practice #2 – Utilize Six Sigma, ORCA, Kaizen or similar approach
Best Practice #3 – Define program procedures and policy with consequences
Best Practice #4 – Automated ongoing training
Best Practice #5 – Flight misuse and fraud with compliance
Best Practice #6 – Maximize the use of the right technology
Best Practice #7 – Implement non-traditional Use:
- Move major dollars to the P-card
- Raise single & monthly spend limits
- Move travel on one card and/or one provider
- Manage spending beyond P-card: Ghost card: No plastic
Best Practice #8 – Proactive bank and supplier relationships
Best Practice #9 – Use metrics for Best Practices #1 through #10
Best Practice #10 – Maximize savings: Align your procure-to-pay strategy
Source: © 2009 TakeCharge Technologies