Organizations typically look at Purchasing Card (Pcard) program in an effort to reduce operating expenses on low- dollar, non-strategic processes and also gain profits via rebate programs that Pcard providers typically offer. While there are certainly benefits to implementing such programs the trade-offs should also be reviewed and appropriate strategy implemented to address and plan accordingly. Below are some examples of such trade-offs:
- Reconciliation: What does this process look like? If users are involved then they could just be shifting their time from P2P process to P-card reconciliation
- Spend visibility: If no requisition how do they include p-card data into their overall spend visibility and budgeting?
- Credit card fraud
- Confusion for users when they should use p-cards vs creating requests
A lot of the same benefits that may be gained with a Pcard program can also be provided by processes built into Coupa. Exampes include:
- Catalog price controls
- Small dollar self approvals on reqs eliminating processing costs
- Electronic invoicing options such as SANs where onboading is not required
- PO to invoice matching/reconciliation done by system
- Early discount payment opportunities
If your organization is still looking to implement a Pcard program below are recommended planning, design and configuration considerations.
Since Coupa doesn't recommend storing credit card information within Coupa, Coupa customers usually implement P-Cards by only storing the last four (4) digits of the purchasing card on the supplier or user records. After assigning a purchasing card to each supplier or user, the supplier then receives the last four (4) digits of P-Card number on purchase orders they receive. The configuration of the P-Card information in Coupa is relatively simple. However, the complexity lies in the supplier enablement activities, and your chosen reconciliation process. Specifically, choosing which users/suppliers will have Pcards assigned, communicating this change to the targeted suppliers, negotiating rebates and other incentives for providing the supplier with a simpler, faster payment method, and reconciliation of the payments made to the supplier via the P-Card.
It is important to note that the primary design decision consists of deciding which reconciliation option that you plan to choose. Please see options in a help article here:
Other design considerations:
- If you require that the entire credit card number is sent to the supplier, Coupa has a paid PCI compliance service to support this requirement.
- Managing the change with the employees working with the newly targeted P-Card suppliers is essential for your reconciliation process. Communication with these employees about the new process, and their role in this process is essential to the success of this effort.
- While rolling out your P-Card program, it is important to define the spend categories and spend thresholds for use with the P-Cards.
- Meticulous planning on how the spend is captured in your GL to create journal entries is required. This is dependent upon your reconciliation process, but is required for accurate, efficient, and effective reconciliation.
When deciding your rollout strategy, Coupa suggest a two-phased approach. The first phase would consist of an Early Access Program (EAP) that targets a small set of suppliers. During this phase, you would have the opportunity test out the P-Card process and reconciliation strategy. This would normally take 1 - 2 months to allow for your to go through your month end reconciliation process.
The second phase would then consist of rolling the P-cards out to all of the targeted suppliers.
Setting up P-Cards in Coupa is a simple process. Specifically, configure the P-Cards in Coupa by storing the last 4-digits of the purchasing card on the supplier or user record.
Plan for On-going Maintenance:
It is important to develop a governance process for monitoring P-Card usage, managing expiring cards, and assigning an owner to manage the suppliers and to quantify any savings achieved from the P-Card program.
Supplier Enablement Activities:
Organizations may use purchasing cards to target low value goods and services to take advantage of lower processing costs and possible discount rebates than traditional payment methods. To accomplish this, the following supplier enablement activities are required:
a. Identify suppliers for the P-Card program
b. Assign P-Cards to each supplier or user
c. Communicate the change to each supplier part of P-card program (Email and Telephone campaigns)
d. Negotiate any discounts or rebates
e. Monitor the suppliers usage of the P-card to determine if the expected savings are being achieved.