Purchasing operations with established p-card programs continue to find innovative ways to use the payment tools.

At Southern Company, an electric utility based in Atlanta, Becky Holcombe, purchasing card administrator, manages a p-card program that was among the first to use products available from provider GE Corporate Payment Services in Salt Lake City, which issues the MasterCard purchasing card. Southern Company uses the p-card in its crisis-management plan.

When sending employees out to service customers during times of natural disasters like hurricanes and tornadoes, the utility used to issue cash advances to these workers so they could pay for the items they need to do their jobs. It's an inefficient process that provides little control over spending.

Working with GE, Holcombe put together a list of employees who are "first responders." When disaster strikes, she notifies her account rep at GE who raises the spending limits on the cards issued to the employees. As a control measure, the company audits employee spending on the cards once the crisis has passed.

How does the program work? Holcombe recalls an instance in which the utility's storm center, built to withstand a category five hurricane, was completely destroyed by hurricane. "In the middle of the night I got on the phone with our rep at GE and he increased the spending limits," she says. "Employees purchased what they needed. There was no adverse impact. And, afterwards, our assessment showed no glitches. I think we got it right."

Michael O'Malley, marketing manager at GE, sees use of p-cards in crisis management as an emerging best practice that utilities such as Southern Company are sharing at customer advisory board meetings with companies in other industries concerned with risk management. "More companies are developing policies and procedures that enable them to put their p-card programs on crisis footing in a matter of hours," he says.

GE's customers and others are doing this now because of new control features added to p-cards recently. GE, for one, has introduced a suite of capabilities that includes user profiles that help streamline p-card program implementation. Each profile limits spending to certain MCCs (merchant category codes), or type of supplier. The company's vPayment tool, which issues a unique account number to each transaction, also provides additional control while helping streamline the reconciliation process. The vPayment tool, O'Malley says, gets program managers thinking about putting larger ticket items on the cards.

It's that kind of thinking that is helping to fuel continued growth of p-card programs. New data collected by Accenture for American Express show that companies are putting more of their indirect spend on p-cards than four years ago: 28% today compared with 6% in 2003. The same holds true for number of p-card transactions, says Trang Dihn, vice president of business to business marketing and product management at American Express in New York. Today that figure is 57%; four years ago, it was 16%. She adds that all told, companies now are putting 53% of their total expenditures on a p-card. For the study, Accenture polled companies that use the American Express purchasing card as well as Visa and MasterCard p-card products issued by financial institutions.

The study also shows that compliance to internal and external (regulatory) policy rose during the same period, by 33%, a statistic that Dihn says shows companies are concerned about control and compliance. "It's the number-one priority as they move toward automating and integrating with e-procurement systems." To that end, American Express launched its source-to-settle (S2S) e-invoice and pay tool in March that incorporates use of its p-card product.

"Increasing the value of purchasing cards to their client base is a hot topic with many of our issuers," says Darren Parslow, senior vice president at Visa Commercial Solutions in San Francisco. Visa recently introduced to its issuers an industry benchmarking tool that it developed with Richard Palmer and Mahendra Gupta, authors of the 2005 Purchasing Card Benchmark Survey Report.

The new tool, which will be available to p-card managers in August, "allows companies to benchmark program performance against their peer group across such metrics as monthly card spend and average transaction size," Parslow says. "We've had requests from clients for such peer benchmarking and are happy to deliver that this year." Visa also offers issuers best practice guides on such topics as the one-card (with functionality of both corporate card, traditionally used for travel and entertainment expenses, and purchasing card, and is often used by mid-sized companies) and documentation on controls and compliance.

Likewise, Robert Abele, president of U.S. Bank Corporate Payment Systems in Minneapolis, which issues the Visa purchasing card, hears from customers of a continued need for more control over p-card programs. Some of this concern, he says, stems from fraud and misuse issues reported over the years.

U.S. Bank, along with GE, JPMorgan Chase and Citibank, were selected by the General Services Administration for its new SmartPay 2 program that provides purchasing, travel, fleet and integrated charge card services to the U.S. government. U.S. Bank has provided cards to the federal government since 1986, and is one of several providers now participating in the first GSA SmartPay program, which ends in 2008.

U.S. Bank offers customers—both government and corporate—its Access Online program management tool and PowerTrack, an e-invoice payment and presentment tool. To meet that need for increased control, it added functionality to the Access Online tool called PaymentPlus, which allows organizations to send the financial institution a payment instruction file through which it can set up single-purchase use accounts. It also allows for an automated temporary increase in credit limits.

"This capability allows customers to grow their programs by providing control and visibility over a greater swath of AP payments that can be made on the card," says Abele. Another way U.S. Bank and other financial institutions help customers expand programs is through an activity many in the industry call "optimization," which involves identifying transactions settled by check or automated clearing house (ACH) that could be put on a p-card.

P-card managers at corporations are squeezing more value from their programs by expanding their use to facilities located in other countries. Marcie Verdin, group head, large market segment, MasterCard Worldwide in Purchase, N.Y., sees a number of request for proposals (RFPs) from U.S.-based corporations that include other countries. Outside the U.S., corporations have "strong" programs in Australia, South Africa and some Asia/Pacific countries. Growth is occurring in these regions, she says, because the countries' tax authorities have approved p-card reporting tools.

Verdin says that MasterCard has focused efforts during the past two years on helping issuers and their clients to optimize their programs. American Express and Visa provide similar services. MasterCard has introduced tools and calculators, including one that uses data on best practices provided by researchers at Aberdeen. It's also worked with Ariba on integrating the p-card into the software provider's hosted on-demand e-sourcing solution, introduced at the Institute for Supply Management annual conference in Las Vegas in May.

JPMorgan Chase in New York provides p-card managers with a holistic approach to both the payables and receivables processes with its Exac Trac and AP Trac tools that help companies to grow programs while maintaining control, says Frank Dombroski, vice president, Commercial Card Solutions. JPMorgan Chase purchased the commercial card issuing operations of Paymentech in 2001 and Xign last year for the companies' expertise in these areas.

The financial institution's Exac Trac product automates payment, reporting and reconciliation processes. Its use activates a Visa or MasterCard account number for each transaction that requires a two- or three-way match. After payment, Exac Trac automatically reconciles these account numbers to prepayment documents such as a PO. No one can request a card number without approval. Other features include capability to set spending limits and track and reconcile payment.

AP Trac is an electronic card-based settlement tool for accounts payable that integrates with a financial or ERP system and transmits payments directly to suppliers via the MasterCard network without supplier intervention. A Web-based portal provides p-card managers and suppliers with visibility to payment status and history.

According to Eldon Passey, senior vice president, group head, Commercial Cards at LaSalle Bank in Glenville, Ill., p-card managers are looking for more automation without it being difficult or challenging for suppliers. As such, the financial institution has developed a process that allows customers to use p-cards to pay suppliers with little disruption to the AP process. LaSalle remits information to the supplier, does reconciliation and alerts AP staff only of unmatched items.

Another online tool, available by year end, generates a PO and assigns a unique account number for each transaction. The tool automatically reconciles the transaction and integrates data into back-end financial systems. The process is unique, Passey says, in that it supports multicurrency programs, enabling purchasers to pay suppliers in dollars, euros, Canadian dollars or pound sterling.