How to get the most of your purchasing card

It can cost as much as £60 to process an order using conventional methods. When you consider that nearly three quarters of all corporate purchases are under £500, this cost is disproportionately high. When you use a Barclaycard Business Purchasing Card, a whole month's transactions can be settled with one convenient single direct debit payment.

Here is a real example of a company who discovered the true benefits of their Barclaycard Business Purchasing Account.

About Napp Pharmaceuticals Limited

Napp is a pharmaceutical manufacturer whose head office is based in Cambridge with in excess of 700 Company Members. Napp has expertise in innovative controlled release technology to develop specialised medicines, especially for the relief of severe pain.

Why Purchasing Cards?

Napp undertook a review of its third party expenditure and it was highlighted that the Procurement department where involved in a significant 'tail' of low value purchases. As a result a low value transaction strategy (LVTS) was developed in order to more efficiently manage low value low risk transactions which demand a considerable amount of time and effort from both Procurement and Finance to manage. The key objective was to focus Procurement's skills and resources where they make maximum business contribution.

The proposed LVTS is an integral part of Napp's overall procurement strategy of which purchasing cards will assist in improving the efficiency of the procurement process and to make it more user friendly particularly for lower value and often repetitive purchases.

Preparation

1. Do your statistics first!
   1. Understand the spend pattern based on the volume of transactions (PO's) processed and expenditure bands
   2. Understand the current buying methodologies applied.
   3. Identify the departments and names of the requisition raisers.
   4. Also consider the number of transactions that go through accounts payable.
2. Map the current ordering process detailing the steps involved and the authorisation process.
3. Identify the requisition raisers who are raising the highest volume of low value transactions.
4. Identify senior the senior stakeholders based on the areas of the business suitable for a pilot with a focus on the highest volume transaction departments.
5. Develop a business case outlining:
   1. Project description
   2. Business benefit
   3. Objectives
   4. Risks
   5. Alternatives
   6. Include supplier proposal, transaction volume analysis, project plan and examples of MI reports from the supplier.
6. Provide key stakeholders with business case prior to meeting and prepare presentation slides to discuss, focus on the benefits to the respective department/business and sell them!
7. Seek agreement to proceed with a pilot across four departments (identified as the highest transaction depts).
8. Recommend the proposed core team to implement initially with both procurement and finance representatives and agree roles/responsibilities.
9. Commence the development of a business operating procedure (BOP) and gain approval from Senior Reps in the business (including Financial Director, Head of Finance, Director of Personnel & Development, Production & Supply Chain Director & pilot card holder user) prior to implementing the pilot (this will form an integral part of the training). A glossary in the BOP was provided which was found to be beneficial and we kept the number of pages to a minimum.
10. Meet with the proposed card holders in order to provide them with an insight to purchasing cards, benefits etc this meeting is more about awareness of the new buying methodology and managing change.
11. Agree the expenditure limits with Finance.
12. Consider how the training will be delivered and the use of technology to assist, we provided desktop training software to assist card holders in completing the transaction log.

Appoint Provider- Roll out Pilot

Napp currently has a contractual relationship with Barclaycard Business which also includes the supply of corporate and lodge card programmes. It was agreed that Napp would develop the existing business with new commercial terms.

Firstly the core team kicked off a detailed project plan outlining the activities, responsibilities, objectives, training, transaction log format and agreed time-scales. A project plan was agreed with Dean Owers, Napp's Relationship Manager, using Barclaycard Business Voyajer implementation and methodology principles. Key milestone were discussed at regular review meetings. Preparation and planning were key to a successful implementation and we found that Napp had already completed 80% of the roll our work required.

Training and communication was crucial to assist in the implementation and success of the pilot

• Training material was crucial to assist in the implementation, training folders and certificates where provided and developed with Barclaycard Business.
• Training and presentations were arranged with the nominated cardholders for the pilot, in our case the pilot was to run for a period of 3 months.
• This would be a significant shift in our culture by empowering our card holders to do their own buying; we therefore needed to ensure that we communicated the change and the benefits very effectively to ensure we received 100% buy in and support.
• We provided feedback templates to the cardholders to ensure we captured the lessons learnt.
• We also provided software that enabled desktop training for reminders of how to complete the transaction log.
• Our key objective was to ensure that we focused on delivering the training and being available for advise and support.
• We also provided a quick reference guide which provided a summary process of how to use the card.
• As a high % of cardholders had not purchased on behalf of the company before we also provided basic principles with regards to commercial awareness*.

The project team had to ensure that application forms where accurately completed with the Manager's authorisation and sent direct to Barclaycard Business for processing.

We agreed convenient training dates & venues for all the proposed cardholders and invited supplier implementation & Barclaycard Business to the launch. Once the training was completed we issued the cards with training certificates.

After the first 3 months we arranged a review with the pilot cardholders with supplier representatives to understand any lessons learnt from delivering the training to the goods being delivered to our Warehouse, as a result the BOP was amended to reflect the constructive lessons learnt in order to prepare for company roll out.

Company Roll - Out

Over thirty Managers were briefed in a combination of group and on-to-one presentations to ensure that they fully understood and appreciated the benefits of purchasing cards.

Napp mirrored the training and implementation of the pilot, incorporating the lessons learnt. The project team also invited cardholders from the pilot to attend the launch to share their views of the use of the card, which greatly assisted in reinforcing the benefits.

Some of the stages identified for Roll-Out were as follows:

1. Prepare cardholder names and identify all the individual managers.
2. Agree presentation meetings to line manager's explaining the purchasing card concept and prior to meeting the managers so they are aware of the recommended card holders, a total of 30 managers where briefed.
3. As part of the influencing process to the Managers we used quotations provided by the card holders in our presentations.
4. One to one meetings where also arranged with Managers who where not able to attend the group presentations.
5. Both the presentations and one to one meetings took 10 minutes per session, we need to keep the briefing as informative as possible considering how busy our Managers are.
6. We mirrored the training and implementation of the pilot incorporating the lessons learnt. The launch and training was over 2 separate days, the training took 1 hour per session. We also invited card holders from the pilot to attend the launch and they where happy to present their views of the use of the card which greatly assisted in reinforcing the benefits.
7. 6% of Napp employees have now been issued purchasing cards and MI stats are monitored closely.
8. Our Finance department (card administrator) plays a key and active role in managing the adherence to the administration of the purchasing card process.

Post Roll out Management

The project team arranged for two separate briefing sessions with cardholders in March (6 months after the launch) for them to provide their feedback, concerns and issues. This also served as an opportunity for Finance to provide feedback with the issues around completion of the transaction log recording which has caused challenges.

Moving forward Napp is currently developing with Barclaycard Business a structured supply relationship management plan as a result of the successful implementation of purchasing cards. If more suppliers were VAT enabled then a large element of manual checking that VAT receipts are required would be removed.

Working with Barclaycard Business to increase the number of suppliers who accept purchasing cards to be VAT enabled would be very beneficial and Napp look forward to developing this next stage with Barclaycard Business.