18 Jan 2010 Use a purchasing card to integrate your purchase to pay processes
Purchasing cards are used to manage high volume low value spend. Right?
Wrong! Well – not wrong exactly – just not as right as it can be. Over the last 15 years or so, purchasing cards have been quietly evolving from the useful tool to manage high volue low value spend to the highly sophisticated business solution that we have today. Problem is, nobody’s been telling us – or if they have we haven’t been listening.
Take this product for example from RBS. It’s a card product A2B – Approval to Buy and it generates a new card number for every transaction. Marketed as a product to give added control and flexibility it looks to me like a solution waiting for a problem.
But there is a problem that A2B can solve and it’s not the one that RBS were thinking of – interoperability and systems integration.
Consider this business problem. A medium sized company made its ERP investment over 10 years ago. Systems are looking archaic. The requiisition process and supporting systems aren’t properly joined up to the ordering systems. There a very few successful electronic trading relationships with suppliers and although the accounting system is fully integrated to the ordering sytem, the quality of data on orders and invoices is so poor that most invoices don’t match first time. Sound familiar? This is where A2B comes in.
Imagine all of the important documents in your P2P value chain as seperate scraps of paper all different shapes and sizes. There is supposed to be common data that connects them all. A purchase order makes reference to a requisition number. An invoice and a goods received note make reference to a P.O. number. In an ideal world they would all match but in the real world they don’t. If the requisition was created using A2B, A2B acts like a piece of string threaded through each seperate document so that when you pull the string tight – they all match – and match uniquely and exactly. It doesn’t matter if the P.O. number on the GRN was wrong or the description in the P.O. is different to the invoice.
For the medium sized company – or a large one for that matter – that can’t contemplate a major systems investment in P2P, A2B could be the solution.