Too Many Purchasing Card Controls Make Payment Strategies Heavy and Sluggish

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NAPCP identifies problematic behaviors and coaches organizations to get in shape. Two-Day Controls Workshop in Dallas, Texas, January 15-16, will allow attendees to apply forensic analytics to their own Purchasing Card data.

Transaction Reconciliation Poll

Poll: On average, what percentage of your cardholders do not reconcile their transactions on time each period (e.g., cycle, month)?

21% of poll respondents indicated that, on average, 10% or more of their cardholders do not reconcile on time each period.

Time and again, organizations of all sizes say they want to improve efficiencies and reduce costs. Yet they sabotage this goal by over-controlling their payments and, in particular, card programs (e.g., Purchasing Cards).

That’s why the NAPCP is announcing a brand-new two-day workshop, “Strengthening P-Card Controls and Using Forensic Analytics to Detect Fraud, Errors, Waste and Abuse,” scheduled for January 15-16, 2013, in Dallas, Texas. This workshop will be co-taught by Lynn Larson, CPCP, NAPCP, and Mark Nigrini, Ph.D., Professor, The College of New Jersey. The workshop will include a hands-on component where attendees will apply forensic analytics to their own P-Card data. Complete details and online registration are available at Discounted rates apply through December 18, 2012.

According to Lynn Larson, NAPCP Manager of Education, “Lean, effective payment strategies will remain elusive if organizations limit themselves to traditional purchase-to-pay (P2P) processes, most often involving a requisition, purchase order, invoice and then payment. With so many steps, the process cost often exceeds the value of the item being acquired (e.g., the cost to purchase a $25 wrench may exceed $100).”

Traditional P2P processes, with their well-known controls (e.g., pre-purchase and pre-payment approvals), represent the ultimate comfort food within the commercial payments industry. However, there's a cost to these controls, which is often overlooked in an organization’s quest to curtail risk. Larson says, “People gravitate toward what makes them comfortable. The notion of comfort is what makes ePayables so appealing to organizations evaluating the various Commercial Card solutions. ePayables, of course, are designed to allow organizations to keep doing what they have always done, but switch from paper checks to electronic payments. They feel leaner as a result, but this doesn’t mean they have a well-balanced payment strategy.” Reducing check payments is just one part. Commercial Card providers need to help these organizations— their clients —understand the necessity of a multi-faceted approach.

In the name of control, it might be tempting for an organization to utilize ePayables for purchases ideal for Purchasing Cards. They may not see an issue with this when revenue sharing (rebate) incentives are typically offered for both. However, the bulk of an organization’s purchases, based on transaction volume, do not warrant many of the pre-purchase controls of the traditional P2P process. They could be efficiently streamlined with P-Cards rather than mindlessly “rubber-stamped” and pushed through the chain.

P-Card controls have proven to be effective and palatable when properly utilized and enforced. For example, the key control for detecting external fraud is cardholder reconciliation of their transactions. Unfortunately, a third quarter 2012 NAPCP reconciliation poll revealed some challenges in this area. The poll asked, “On average, what percentage of your cardholders do not reconcile their transactions on time each period (e.g., cycle, month)?” The results, provided below, show 21% of respondents indicated that, on average, 10% or more of their cardholders do not reconcile on time each period.

Organizations should not tolerate such non-compliance with P-Card policies and procedures, as it adds an element of risk to the program.

Over-usage of traditional P2P processes is not the answer. Doing so will prevent buying organizations from reaching optimal payment health. It’s never too late for them to get their payment strategies in shape, but they must consider their needs. To avoid weighing down processes, they should cut the non-value-added activities. This will free up staff time as well and allow better usage of resources. The exercise of identifying a threshold at which extra steps like pre-purchase approvals do not add value (and are actually counter-productive) would be time well spent.

Additional Resources
The NAPCP Resource Center ( contains a multitude of papers and tools for members, including a Fraud Prevention and Detection report and Card Program Controls Evaluation Form that directs end-users on what to review, covering more than a dozen controls-related elements, such as card issuance, data security and card controls.

About the National Association of Purchasing Card Professionals (NAPCP)

The National Association of Purchasing Card Professionals (NAPCP) is a membership-based professional association committed to advancing Commercial Card and payment professionals and industry practices worldwide. The NAPCP is a respected voice in the industry, serving as an impartial resource for members at all experience levels in the public and private sectors. The NAPCP provides unmatched opportunities for continuing education and peer networking through its Annual Conference, Regional Forums, webinars, website, newsletters and weekly communication. The association sponsors research and publishes timely and relevant white papers, survey results and other documents. The NAPCP certifies professionals through the Certified Purchasing Card Professional (CPCP) credential program ( Please visit the NAPCP website to learn more about Commercial Card and payment programs in general, the value of membership, current member demographics, upcoming events and benefits of becoming a year-round partner sponsor.

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Lyssa Campbell
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