Procurement Cards – A Manual for Nonpurchasers

Dr. Tom DePaoli

Credit-card purchases by end-users (your internal customers) can be one of the win-win results of reengineering purchasing. With these direct purchases, end-users are empowered to purchase routine or necessary items.

Many purchasing departments clearly see these tremendous transaction cost savings but aren’t sure how to train end-users to purchase directly with procurement cards or via other methods. The simplest and most effective way to implement this empowerment is to publish a purchasing information manual designed just for them.

PURPOSE OF THE MANUAL
The manual’s primary purpose should be to give down-to-earth “nuts and bolts” instructions. Give clear pointers with concrete examples. Make sure card users receive some basic ethical ground rules and a written company policy on gifts and gratuities, and help them get familiar with rudimentary contract law. Make sure you have the entire purchasing department contribute to the manual. Other key internal departments such as accounting, accounts payable, and receiving can also provide valuable input to further streamline the transaction cycle.

DETERMINE THE CONTENTS
Try to keep the manual brief and to the point. Limit the number of pages. Three-ring binders provide the option of quickly adding and removing information in the future.

Open the manual with a table of contents and divide it into sections via labeled tabs or dividers. The manual should include a purchasing organizational chart and the specific responsibilities of purchasers.

Provide a glossary of typical purchasing terms and some basic purchasing policies and goals, along with emergency contacts. Have a section where purchasing newsletters or flyers can be accumulated, and insert a feedback form in each manual that can be sent to purchasing with end-user suggestions.

GIVE THE DETAILS ON CORPORATE PURCHASING CARDS
Encourage end-users to use procurement cards first whenever possible. Draw analogies to using a personal credit card. List the names and telephone numbers of in-house administrators, along with the 1-800 telephone help numbers of your purchase-card provider. Provide examples of internal control forms and suppliers a list of preferred who accept the cards.

Give specific examples of what to do when items are to be returned or a charge is disputed. Prequalify suppliers by having purchasing actually perform at least one purchase via the corporate purchasing card and reviewing all the subsequent reports.

ORGANIZE THE ROLL-OUT
If possible, publicize the manual’s roll-out in your purchasing or company newsletter. Have a formal kick-off meeting with the entire purchasing team present. Give out the manual at training sessions. Provide smaller training classes for the key end-users so questions can be answered before the manual is used.

Inform your key preferred suppliers about the manual, and give them copies if they desire. Prepare suppliers for the end-user procurement card purchases, alerting them that questions may arise from the end-users. All the manuals should be numbered and an issue log kept so that you know who has been issued a copy. A master copy should be kept in a safe place with pending updates and revisions nearby.

FOLLOW-UP TO THE MANUAL
Every member of the purchasing department should have a copy of the manual. When internal customers arrive in the department with questions, purchasing department members should sit down with them and guide them to the answers in the manual.