Low value transaction strategy improves procurement processes
- Three month pilot scheme
to determine effectiveness and refine programme - 6% of 700 strong staff now have their own purchasing card
and are directly responsible for low value payments - Ongoing work with Barclaycard to increase suppliers accepting Purchasing cards and reduce manual VAT receipt checking
Overview
About Napp Pharmaceuticals
Napp is a Cambridge-based pharmaceutical manufacturer that specialises in the innovation of controlled release technology for severe pain relief medication.
Employees are empowered by the ease of paying for hotels, flights, office supplies and other business expenses, anywhere that accepts Visa cards.
The challenge…
After a review, Napp identified that its procurement and finance departments were spending disproportionate amounts of time processing low value, low risk payments.
The cost of manually processing a purchase was as much as £60. And with nearly three quarters of all corporate purchases being under £500 – this was adding up to a significant drain on resources.
The solution…
By developing a low value transaction strategy to manage these smaller transactions more efficiently, Napp refocused procurement and financial department skills to areas of the business where their contribution adds more value.
Having a Purchasing card system now means staff have the authority to make direct payments for low value transactions in person, by phone or online. And Napp are able to pay a whole months transactions with a single direct debit payment, saving valuable resource time that's better used elsewhere.
The future…
Currently, 6% of Napp employees have been issued with Purchasing cards and Management Information (MI) reporting has shown a significant increase in the productivity of the procurement department.
Ongoing support and management is provided by Barclaycard to Napp's administration and finance departments, ensuring the cards are used in line with the company's purchasing strategy, and processes are fo lowed.
Napp are continually working with Barclaycard to increase the number of suppliers who accept Purchasing cards and are VAT enabled. This will further improve their payment processing, removing the need for manual checking of VAT receipts on lower transactions.
How purchasing cards were introduced
The process
- Together we kicked off with a detailed project plan outlining the activities, responsibilities, objectives, training, transaction log format and agreed time-scales. Key milestone were discussed at regular review meetings.
- It was agreed that Napp would carry out a 3-month pilot programme to allow for feedback and refinement before company-wide roll out.
- Barclaycard were on hand throughout, and devised a training and communication plan to help with the smooth implementation of the scheme with nominated pilot cardholders.
- A high number of cardholders had never purchased on behalf of the company before, so we also taught them basic principles.
- This was crucial, as empowering cardholders to do their own buying was a significant shift in Napp's culture.
- Through feedback templates and software for desktop training, we were able to focus on providing timely advice and support to ensure the pilot's success.
- The project team ensured that application forms where accurately completed with the Manager's authorisation and sent direct to Barclaycard for processing.
- After the first 3 months, we arranged a review with the pilot cardholders and suppliers to discuss lessons learned, and then we took this information and applied it before the company-wide roll out.
Company roll out
- We briefed over thirty managers to ensure they understood the benefits and process of using purchasing cards. Then we invited cardholders from the pilot scheme to share their views, reinforcing the benefits to their colleagues.
- Meetings took just 10 minutes per session, enabling us to prepare for the roll out quickly and ensure that managers were informed and engaged, without being overloaded.
- Finally, launch and training took place in just over 2 days, with training sessions of 1 hour each.
