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P-Cards and their place at the P2P table

An invoice landed on my desk this week, and as I read the covering letter (Yes, really..) explaining that this was the second time they’d sent it and asking if I could pay it straight away, I viewed the £1.25 total with a mixture of amusement and irritation. Add to that the fact that it had already been paid, meaning that someone had to then pick up the phone – the situation offered up a microcosm of what can easily be an everyday occurrence in so many accounts payable departments. Issuing and dealing with an invoice where the amount being billed is significantly less than the processing costs is plain ridiculous – and is something which corporate P-Card schemes were developed to overcome.

So why is it that in the UK P-card schemes haven’t quite taken off in the same way that they have in the States for example. Yes, there are some fundamental differences – such as the continued prevalence of cheques in the US, but that doesn’t explain it entirely. I think there are two factors at play, there’s a basic lack of understanding about their place in the industry and/or they’re sometimes viewed as a potential wild card which, rather than reducing fraud and maverick spend – may actually facilitate it.


Top that with the increasing availability of einvoicing and some of the drivers - faster payments, increased visibility, reduced processing time - may not be quite as compelling as they once were. And if the drivers have been reduced, haven’t some of the dissuading factors - relatively high fees, difficult supplier engagement - increased as a result? Plus, if an organisation has eProcurement solutions in place, ordering via online catalogues can be done with comparative ease. So, bearing all this in mind, I went along to the NAPCP’s event in London to find out what the new generation of P-cards can offer, and what drives organisations to use them.

And what struck me first of all, was how diverse the organisations present were (to some extent regardless of the company size) in terms of their maturity in the automation and solutions market. And that’s where it’s important to take a step back – because of course while it’s perfectly feasible for organisations to be fully automated and achieve straight through processing on virtually all transactions via an einvoicing and workflow solution – those operating in this way are still very much in the minority (less than 11% of UK organisations*). For the most part organisations exist in an environment which needs to create best practice processes which work within existing legacy solutions. And even for those that don’t, there’s still a place for the P-card, and here’s why - if you’re operating a large volume of low value invoices, or if you need to simplify your transactions with one main supplier, it provides an added tool which when added to the whole portfolio of solutions available, can help to take some of the processing pain away.

On the buyer side, it’s about having a system which can leap-frog a situation where the cost of using requisitions, raising a PO, approvals, matching and settlement via the AP process makes the cost of doing business prohibitive. On top of that, by using a P-Card for a large quantity of small items, many organisations pointed out that they were able to get significant rebates from their card supplier, effectively reducing the fees.

During the day the attendees pointed out what they saw as the main benefits of adopting a P-Card programme, here's a snapshot:


•    No PO – reduces transaction time
•    Increased efficiency
•    Better supplier relationship – suppliers receive payment within 2-5 days
•    Simplified purchasing and payment process
•    Increased visibility for compliance purposes
•    Increased visibility into spending pattern (important metric for Sales and Mktg too)
•    Ability to set and control spending limits
•    Ability to control purchases to specific suppliers and supplier categories
•    Rebates based on spend from the card supplier
•    Speeds up the supply chain
•    Ability to negotiate better pricing based on the benefits
•    Takes paper out of the P2P process
•    Serves as an effective control against fraud

P-cards continue to have their place in the P2P world for all of those reasons - but their adoption and continued use after adoption, has a lot to do with the way companies address change and how they approach training. In some cases, attendees to the NAPCP event said that the number of restrictions, complex processes and even duplication of input meant that some of the P-card enabled employees simply avoided using them. In other situations, they highlighted cases where employees had used them to buy unauthorised products or services, making the company nervous about broad usage of the programme.

Both scenarios highlight the importance of addressing change management which was something attendees came back to time and again. Some companies focussed on creating “super users” – those who could train others in correct procedures, others went one step further and actually mandated training throughout their organisation. Regardless of the approach, the day highlighted the levels of complexity and diversity within the P2P environment, and while there’s no “one size fits all” solution, P-cards are still an important part of the armoury, and as long as they continue to innovate and keep step with complementary and alternative products, are likely to remain so.