Procurement Card Pros & Cons

What Should You Know About Procurement Cards?

More than a decade after becoming mainstream, procurement cards remain a key component of procurement departments? repertoires. Whether implementing a new procurement card program or administering one that has been in place for years, procurement departments need to continually consider these pros and cons of procurement cards…

Advantages/Pros:

  • Procurement cards reduce the cycle time of purchasing transactions
  • Procurement cards can improve supplier relations as suppliers receive a payment within 2-5 days
  • Procurement cards can reduce the number of supplier invoices, which could lead to a reduction in expenses on accounts payable personnel
  • With proper controls, procurement cards can restrict maverick buying as well as buying non-authorized categories of goods and services
  • Some procurement card programs can provide clearer reports of how money is being spent
  • Procurement card programs foster a feeling of empowerment among employees

Disadvantages/Cons:

  • Procurement card use exposes the organization to the potential for undetected credit card fraud and identity theft, which can result in lost money
  • The work involved in reconciling a procurement card statement with a purchase log and distributing charges to the proper accounts can divert resources from value-added work
  • Procurement cards generally don’t provide the same level of budget visibility as an ERP system does
  • Multiple ways of placing orders (e.g., Pcard, eProcurement, ERP, requisitions, etc.) can confuse requisitioners who may not know the proper method for each type of purchase
  • Procurement card spend data may not be integrated with other purchase data, resulting in incomplete information when conducting spend analysis

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