News from the NAPP Conference
Purchasing professionals attending the NAPP conference hear word of pcard spending trends first.
By Susan Avery -- Purchasing, 2/7/2006
As results of the 2005 Purchasing Card Benchmark study hit the desks of managers at financial institutions participating in the survey, purchasing professionals attending the National Association of Purchasing & Payables (NAPP) 14th annual conference this week in Orlando got a sneak peek at some of its results.
Richard J. Palmer of Eastern Illinois University in Charleston, Ill., one of the study’s authors, was one of the speakers at the conference which drew 180 purchasing and accounts payables (AP) professionals.Because results of the study were published just this week, Palmer declined to give details of the findings, but he did discuss with conference attendees some general trends that emerged since the last one came out in 2002.
Perhaps the most important is that 87% of respondents expect spending on purchasing cards to continue to grow. Spending on pcards today is roughly $110 billion annually and is expected to rise 11% to 15% annually.
Palmer, who identifies respondents using best practices as having high-performing pcard programs, says that many programs still have room to grow. Typically, a high-performing pcard program has fewer limits or controls; these companies issue more pcards to employees and are less likely to put many restrictions on spending. For instance, where once pcard program managers at high-performing companies limited spending to $2,000 per transaction; today, the threshold may be $5,000. They also have opened pcard spending to more types of spending such as utilities and other services.
Palmer also studies pcard use by the Federal government and often referred to its practices during his talk. One benefit of pcard use demonstrated by the government is that it helps reduce costs by $70 per transaction. Programs also help streamline internal processes.
Results of the benchmark study give a full picture of pcard use. More respondents than ever before in the history of the survey participated in 2005. Pcard program managers at 1,288 companies took part in the study; for the 2003 study, this figure was 579. Just 188 pcard program managers responded to the initial survey in 1998.
Palmer surveys customers of financial institutions such as GE Corporate Payment Services that sponsor the study. Pcard program managers who respond receive a complete copy of its results. Purchasing will cover results of the study in an upcoming issue of the magazine and on www.purchasing.com.
NAPP is a national organization that works to improve the interaction between purchasing and AP professionals. Its annual conference draws speakers who are practicing experienced purchasing and AP professionals. On this year’s agenda were speakers from such companies as Hewlett-Packard, Tyco International, GlaxoSmithKline, The Timken Company, Pfizer, The Walt Disney Company, Levi Strauss and Merrill Lynch. A P2P Technology Solutions fair at the conference included such companies as Ariba, American Express, IQ Navigator and U.S. Bank. For information on the NAPP, go to www.nappconference.com.
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