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Using The Procurement Card Functionality in PeopleSoft Procurement for Small Purchases

Tadipatri Sudarsan
Product Strategy Manager
In most organizations the Procurement department acts as a nerve center to supply goods and services to various departments and users. Often the Procurement Manager and his or her team are responsible for big dollar expenditures to keep the organization marching towards its business goals. Top management in every organization strives to maintain stringent procurement policies to ensure there are no leaks and the purchases are done at the best value proposition point. Often these procedures and policies increase procurement lead times, prevent making cash/card purchases, and makes the process very formal. Though these controls are essential for large spend, small purchases needed by employees are often neglected, which may impact their productivity. At the same time, spending time and effort on small purchases would definitely be a strain on purchasing team resources.
Consider a lab technician requesting a chemical sample worth $10.00 for an urgent experiment and having to wait 3 days for that request to be processed through the same purchasing procedure used for large capital spend. Frustration may occur on both sides as priority may be given to large purchases rather than an individual request. There could be many day-to-day business needs of individuals in various departments amounting to small dollar expenses, but that need to conform to stated policies and processes.
PeopleSoft offers an excellent way to deal with these situations using Procurement Cards, sometimes referred to as a P-Card. Many of PeopleSoft Customers, especially those in Higher Education and Public Sector, use this facility and boost their productivity by avoiding cash purchases. The first step towards this journey for a PeopleSoft customer is to make a strategic decision to implement Procurement Card capabilities for key employees in the organization. The P-Card feature is robust and very secure and would help save valuable time and effort for the Procurement team.
The decision-makers of the organization would identify key employees who could be given P-Cards and also negotiate with Banks for credit cards (Visa/Master) that may offer best return and benefits. Employees who wish to use P-Card for their requisitions or purchases could also request for this provision.  Most organizations already have a corporate credit card policy for their employees so a Procurement card becomes an extension of that service.
As part of implementation the System Administer would perform a one-time setup. Once the setup is complete, Employees with P-Cards would be able view their card details and further personalize their own defaults. The card number would default from the requester profile or from the vendor, to facilitate a more streamlined process flow.
P-Card features offer many controls and safety mechanisms to ensure the P-Cards are utilized for genuine business transactions rather than personal purchases
The card numbers are masked for security reasons.
The card numbers are stored safely through encryption.
Proxies could be defined for who can approve the transactions.
Card Maximum Allowed Spend limit could be custom defined by working with card issuer.
Specific merchants may be blocked so Procurement transactions cannot be made.
PeopleSoft has another safe feature called the ghost card. With ghost cards, when a purchase order is transmitted from PeopleSoft eProcurement to MarketPlace (to the vendor), the P-Card number is not transmitted. Instead, the vendor is directed to use the P-Card that is on file. This ensures safer electronic transmissions because the P-Card number is not contained in the transaction.
These security features ensure Employees who are custodians of P-Cards can make transactions safely and also ensures Organization controls are enforced to avoid misuse of cards.
Companies are reluctant to use P-Cards as they envision problems in keeping track of pay by dates, amounts, spend limits, and submitting the expenses to the Accounting department in a timely manner. Use of the P-Card feature addresses all these concerns through the automatic uploading of statements. In the event there are any errors encountered while uploading the credit card statement lines, the lines would be posted to the “correct error” page where it could be addressed by someone. P-Card transactions can be reconciled against voucher transactions to ensure all the payments happen in time.  Though a large number of statement lines may get uploaded for a monthly statement, the Reconciliation capability makes it convenient for users employing data chunking, sort, and find options within the data display. The P-Card facility can also be extended to Requesters by allowing them to enter their P-Card number at the time they create their Requisitions. Purchasing departments could then buy items for the Requester and transactions would directly hit Requestor’s Card which would ensure accountability on department spend. The P-Card can also enforce commitment control and budget regulation so these small purchases are made within the stipulated budget. There are several standard reports available for the users to generate to review P-Card activity.
P-Cards help organizations to save precious dollars by taking advantage of early payment discounts, P-Cards reduce time and cost of procurement of goods and make the payments a lot easier. P-Cards facilitate spend tracking by supplier just by doing few setups. Surely P-Cards is a win-win strategy for enterprise organizations, employees and vendors. It also promotes business for VISA/Master card issuers!

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