Yesterday, I blogged about how even purchasing departments hate the PO process and their awareness of the cumbersome nature of generating a PO naturally leads to the use of alternative tools like P-cards and eProcurement systems. Well, if you were thinking that this was the year that you really, really expanded P-card use, you may have another thing coming.
I have noticed a trend in the industry, likely as a result of the credit crunch, that could put the brakes on your plans for increased P-card use. The various parties involved in administering credit cards are resisting the push for more credit flow.
Specifically, I’ve noticed that suppliers are having a hard time getting their p-card acceptance limits – such as those restricting the value of a transaction they can accept and their overall periodic (e.g., monthly) limits – increased. And, sadly, this does not have anything to do with the financial health of these suppliers!
So suppliers may be forced to ask for more purchase orders in lieu of P-cards. This is bad in a number of ways: suppliers who struggle with cash flow may be more challenged to stay in business and purchasing departments will not be able to divest as many of the inefficient PO volume that they had hoped.
Keep this in mind as you work to find ways of making the purchasing process easier for yourself and your internal customers.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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