Purchasing Card Growth Dramatic in Programs Adopting Master Agreements, According to AberdeenGroup Research.
BOSTON -- Expenditures managed via purchasing card programs have grown over the past five years at a compounded rate of approximately 21%. This is due to the diligence of program directors who are deploying card payments in an increasing number of spend categories, with assistance from card issuers, to improve reporting and supplier acceptance. Transactional volumes over this same period have grown 15% per year, on average, according to a new report in the Invoice Reconciliation and Payment business series by AberdeenGroup. E[acute accent]The report, "The Purchasing Card Benchmark Report - Best Tactics to Increase Program Growth," demonstrates that companies that address new spend categories and supplier types, and embrace technology for reasons beyond employee and administration convenience, have seen the most notable program growth. The report also reveals that despite the growth of purchasing card ("P-Card") programs and the relative satisfaction of most programs' original charters, many program directors believe their programs have reached a plateau. E[acute accent]"Purchasing card programs are ready to come of age", according to Jeff Pikulik, a lead analyst in Aberdeen's Procure-to-Pay practice. "A fresh approach can boost the value and significantly improve growth of P-Card programs," said Pikulik. "For too many users, setting and resetting program parameters and policy guidelines feels like progress, but greater business value and cost reduction opportunities remain locked in by paradigms of the original program scope. These models were created in the early years of P-Card programs, and they under-utilize modern workflow and data management tools now available" E[acute accent]Aberdeen recommends purchasing card programs challenge program scope and expand the programs by addressing master agreement and contract pricing requirements, examining specific purchase order types that lend themselves to payment via purchasing cards, extending the program to service categories, and proactively exchange electronic payment remittance information on suppliers providing non-traditional, large project, or recurring services requirements. E[acute accent]AberdeenGroup and the National Association of Purchasing Card Professionals (NAPCP) benchmarked over 170 corporate purchasing card programs during the first quarter of 2005. This study was sponsored by American Express, MasterCard International, Visa USA, and GE Corporate Payment Services.
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