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Breaking out the plastic:
New card offerings ease the transactional burden
Lisa Wichmann
Purchasing and commercial cards have been around for years, with various levels of acceptance throughout North America. The general consensus is interest in the cards is on the rise, perhaps because of efforts by purchasing managers to shift their departments from a transactional to a strategic focus.
Processing hundreds of purchase orders every day—especially for low dollar values—is now considered a misdirection of resources. Instead, many organizations are allowing employees to make smaller purchases on their commercial cards.
Vendors are doing their part to ensure there's enough choice and functionality in their offerings. The burgeoning popularity of the cards is also bringing new entrants into the market.
For instance, Diners Club (Chicago) introduced a new purchasing card in the spring. The program was designed with flexible options, such as choice of billing cycles; and online reporting tools for easy visibility of transactions.
Diners Club conducted a survey recently to discover the main motivators behind p-card adoption. In the study, 44 per cent of respondents—which were middle-market executives—mentioned "better expense tracking" as the number one advantage of purchasing cards. Other factors noted by respondents included streamlined buying and reduced transactional costs.
Employee relocation
The spring also marked the release of the new American Express corporate purchasing card, which was designed by AMEX in partnership with Royal LePage Relocation Services. It's billed as the first-ever purchasing solution for relocating employees in Canada, and includes a declining balance feature, which allows employees to draw on a pre-loaded amount of funds for their out-of-pocket expenses.
BMO Financial Group has also come to market with a new commercial card—a corporate Mastercard—designed to automate purchasing, while providing enhanced management tools. It's intended for employees' day-to-day expenses and travel and entertainment.
The BMO details Online service allows managers to access, manipulate, export and integrate purchase data into their own existing data management systems, according to BMO.
In general, purchasing cards find optimal use in companies with more than $10 million in annual sales or operating budget; and more than 50 employees, according to Visa Canada. They're often used for day-to-day business expenses such as office supplies, courier services and computer equipment. But above all, they enable the streamlining of the purchasing process—making the department less tactical, and more strategic.
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