Examples of purchasing cards

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Examples of purchasing cards

An example of the use of purchasing cards from companies is that used by the South Carolina Department of Health and Environmental Control (DHEC). One of the first decisions to be made in setting a P-cards program is to set a purchase limit per purchase card per transaction and a monthly purchase limit per card. Using $1,000.00 as a purchasing limit, the company then created a report from an automated purchase system that showed the total amount of purchases made to the company was less than $1,000.00, and in addition, found 83% of DHEC purchases were less than $1,000.00 but purchases were only 27% of the total dollars spent on purchases of less than $1,000.00. To produce a single purchase order is estimated to cost the state as much as $150.00 in processing time and resources. When making a small purchase or shopping, for example, $10 or less, it’s easy to see that the processing costs are much greater than the purchase itself. With purchasing cards, no purchase orders are made and money doesn’t come out on its own so it can save on expenses.

P-cards or Purchasing Cards or Procurement Cards also have some shortcomings or constraints that can be experienced by companies or departments that use them. Some of these constraints can be found, including changes in the price of goods to be purchased, changes in the amount of supply, and miscommunication with the vendor of the goods to be purchased, and planning that is not integrated. One way to reduce these obstacles is to appoint or select purchasing card coordinators. The task and function of the P-Cards coordinator is to monitor the eligible purchases used by cardholders by requesting the use of reports from the software used.

BIBLIOGRAPHY

Romano, Catherine. (1994). “Purchasing Cards Save Money”. Management Review, vol.83(4), pp. 6.

Dixon, W.J. (2004). “Purchasing Card For South Carolina Department Of Health & Environmental Control. S.C. State Library. State Documents.

Graves, E.T. (1998-1999). The Advantages and Disadvantages of Procurement Cards. 17 J. St. Tax’n 79.