Procurement Card Processing

The benefits of using Purchasing Cards (P-Cards) for low value items are well documented and the potential business case, on paper at least, can look compelling.

Removing the administrative burden of SAP Purchasing Ordering and reducing the volume of paper invoices are two tangible benefits for business users and accounts payable, so why is the use of P-Cards not more widespread?

The answer is that some of the claims made by P-Card providers start to look optimistic when SAP users appreciate the challenges they face from both a business process and SAP integration perspective.

P-Card providers typically pay scant regard to SAP integration and reconciliation processes, which can lead to projects being shelved or worse still under delivered and therefore not achieving the promised benefits.

In theory, business users procure goods/services using their P-Card, the vendor gets paid by the bank and the bank gets paid by the buying organisation at the end of the month, often by direct debit. The bank provides a file for uploading into SAP to generate the financial postings.

In practice, the following are just some of the practicalities that have to be considered if an organisation wants to introduce P-Cards as a controlled means of purchasing goods/services

  1. How do you know the card-holder received the goods/services?
  2. How do you know the vendor has charged the price agreed with the card-holder?
  3. How do you manage dispute resolution between accounts payable, business users and vendors?
  4. How do business users code (gl, cost centre, wbs etc..) the line items?
    • If external to SAP on a portal – How do you ensure the user adds the coding on time to avoid receiving a file with missing data?
    • If the coding is added to the file received from the bank manually – How do you manage the process to add missing data and reconcile the file on a timely basis?
      5.  How many of approved vendors are Level 3 data providers ie. Able to provide VAT details at              line item level and therefore enable VAT reclaim without the paper invoice?
      6.  How will accounts payable manage the process of obtaining paper invoices and receipts from
           vendors/users to reclaim VATif approved vendors are not Level 3 providers?
      7.  How is the file received from the bank going to be uploaded in SAP?
      8.  What tools are available to manage the reconciliation?

Cogent Consulting deliver SAP certified P-Card solutions which work inside SAP and provide tools to manage all of the above and more.

See P-Card Cockpit for more details.