Payments

What are procurement cards?

Procurement cards are charge cards which work in a similar way to credit cards and can be used to purchase goods or services. They can be treated like traditional charge cards and can be open to use with any suppliers or they can have controls placed upon them by the employer, limiting them, to use with only certain commodities or suppliers.

Procurement cards are established across the UK Public Sector and if deployed effectively can deliver significant administrative cost reductions and benefits.

To say there’s a late payment “culture” in the UK is something of a misnomer, because the implication is that paying late is both intentional and endemic. And the reality is a little more complex, as I found out last week during a conversation with Philip King, Small Business Commissioner and former CEO of the CICM

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.

You don't have many dealings with foreign currency - so why should you be concerned with exchange rate fluctuations?   The answer is, that in our increasingly global economy, you're likely to be wrong.

No matter how isolated your organisation seems to be from large scale foreign transactions, it's likely that at some level it will be affected.  In some large organisations where exposure to the threat of currency fluctuations is a relatively new phenomena - many AP departments simply hand over the responsibility to their central banking partners.  In many cases their bank will be acting with their own best interests at heart, and not those of their client.  This situation is compounded further when AP departments have a rigid payment system whereby invoices must be paid on or by a certain date regardless of what may be happening in the markets.