I’ve been reading this morning about tighter controls that are being called for on the Government Purchasing Card programme. Now we’ve been here several times before and I’m getting an overwhelming sense of déjà vu. Surely by now we know that:
The GPC is an efficient way to spend
The paperwork involved in making cash claims or processing low value invoices is phenomenally wasteful and can cost more than the value of the initial claim. Walsall Council managed to reduce the cost of invoice processing from £5.60 to just 25p by using the right procurement solutions. But the processes around procurement and credit cards need to be robust.
Cards give more control not less
You can quickly see a whole host of information, not least what’s actually being spent, where, when, how much and by whom. There’s no tampering with data, mis-keyed information, paperwork delays, or manual data entry. You get consistency of information, can analyse spend across a range of parameters, set alerts, or even block various types of transactions.
Receipts are not your enemy
Not checking receipts is not a sensible way of reducing red tape and speeding up the process, but processing receipts electronically is. Receipts are important, you can prove what’s been spent, they give an audit trail and they allow an organisation to claim back all the tax their entitled to (which was £110,000 per year on improved VAT reclaim for Essex County Council. You wouldn’t give someone thousands of pounds in cash without a few rules so why do it with credit or procurement cards?
Approvals can be quick and easy
Organisations should regularly audit their expenses, but this shouldn’t be the only checks that take place. 100% of expenses can be checked and approved by the appropriate manager really quickly and simply, but only with the right electronic system. If approvals involve completing paper expense claims, stapling receipts, sitting in internal mail or in-trays for weeks only to reach the desk of the wrong person then checks are always going to be inefficient and unreliable.
It seems that some public sector organisations are doing much better than others. Essex County Council and Walsall Council for instance have been leading the way in controlling their purchasing card spend and it’s saving them each hundreds of thousands of pounds a year and helping them make best use of tax payers money.
There’s no excuse for any public sector organisation to still be having problems with approvals, receipts, innappropriate spend or misuse. They just need to make sure they are using the right technology to properly control their spend. Departmental accounting officers need to step up to the challenge and tackle these issues so we’re not having the exact same conversation another 2 years down the line.