Purchasing cards improve relations with suppliers

UK businesses and organisations will significantly simplify eprocurement activities and their relationships with suppliers, if they introduce purchasing card facilities, new guidelines suggest.

Purchasing cards are issued by credit card suppliers and operate in a similar way, garnering trust between suppliers and purchasers, while at the same time reducing costs and complexity.

Eprocurement guidelines from best practice network BuyIT covering purchasing cards and electronic invoicing and payment systems, are urging government bodies and businesses to follow the guidelines to ensure they make the most of their eprocurement systems.

'The area of electronic payment is one of the keys to enabling closer trading between companies as well as reducing internal costs,' said BuyIT chief executive Frits Janssen.

'Purchasing cards and their integration into eprocurement solutions, are key to reducing internal costs,' he said.

According to David Harrison, BuyIT member and public sector development manager at Visa EU, the use of purchasing cards is already relatively widespread within purchasing divisions, but not enough companies are using them in conjunction with their eprocurement systems.

He believes wider adoption will result in a reduction in costs and much simpler processes.

'This is about ease of use, certainly,' Harrison said. 'If you buy anything on the internet as a consumer, you use a card. In that sense a transaction between government or business shouldn't be that hard.'

'If you're using a purchasing card the supplier gets the authorisation and the comfort that money is winging it's way to their account.

'The customer benefits from knowing their supplier is being treated in that way and it improves the relationship between the user and the supplier,' he said.

The government is singing from a similar songsheet.

'The government's aim is to make the UK the best place in the world for ebusiness,' said chief secretary to the Treasury, Paul Boateng. 'The use of purchasing cards is a key element in facilitating online trading between organisations.'

BuyIT and its members are also suggesting that businesses automate the processes of receiving and paying suppliers, and regard it as part of the overall eprocurement system.

'The total, end-to-end, processes should be optimised and automated to significantly reduce costs as well as improve visibility and control of payments and invoicing information,' the guidelines state.

'Being able to present and pay invoices electronically is an obvious element of this [eprocurement], but until recently one of which few organisations have taken full advantage,' said Stephen Timms, ecommerce Minister.