Once in place, even the best designed corporate spending control program eventually reaches the point at which savings and process efficiencies can best be sustained by incorporating new categories of spending. It's at this juncture that strong user and supplier buy-in, and intensive reporting capabilities prove their worth, enabling the program administrators to respond to new opportunities. Most companies tend to focus on using cards only for high transaction, low-dollar items. To maximize savings, companies should also investigate expansion of use into spend categories such as temporary services and computers.

The convenience of a commercial card program, coupled with strong senior management support for the implementation, brings more immediate acceptance from employees and helps maintain high program compliance levels - in turn driving immediate cost savings and process efficiencies. Strong program management and spending discipline enables companies to reduce their vendor pool, which eases the administrative burden, one of the hidden 'soft costs' of procurement.

The reduction in purchase order processing costs is one frequently used benchmark of success for procurement programs of all kinds. At one Visa client, it cost around $120 to process a purchase order before moving to a VISA Commercial Card Program. The Program reduced that expense to between $4 and $6 per purchase order. In addition, unauthorized and off-contract spending was drastically reduced and the company now has better spend visibility for reporting. Also, the company's purchasing function gained better control over spending, and the vendor pool was reduced, with spend being consolidated with preferred vendors wherever possible.

Once a VISA Commercial Card Program has been implemented and shows reductions in cost and increases in business process efficiency, the next step is replicating these gains across a broader range of spending categories. Sometimes the organization has simply hit a plateau in terms of card distribution, having reached the maximum number of users. To further benefit from the reduction in transaction costs, and the efficiencies that come with improved reporting and control, rolling out the card program to new categories of spending is a logical next step.

To be accomplished smoothly, the addition of new spending categories to the card program requires management-level support. The process begins with an analysis of spending patterns in a targeted category or categories, a work-through of the projected and potential cost savings that can result from moving new spending categories onto the card program, and the presentation of the fully supported business case to the manager who has authority to give the go-ahead.

To determine which spending categories will benefit most from the transition to a VISA Commercial Card program, the Visa Procure-to-Pay Best Practices Study recommends that existing supplier relationships be examined, with a view to targeting suppliers with high transaction/spending levels or recurring payments. Card issuers can help with the analysis of accounts payable files, vendor targeting and data gathering.

And a large-enterprise client that set itself the goal of increasing card volume by 75 per cent in a year found that by being proactive the actual volume increase came to more than 450 per cent over that time period! "The increase in volume hasn't just brought major process efficiencies, either," says the program administrator. "we've also been able to negotiate much better discounts with the vendors in these areas."

And a large-enterprise client that set itself the goal of increasing card volume by 75 Internal relationships between users and management also play a critical role. One company makes sure that its card program is discussed at different business unit meetings to raise awareness of the program, encourage card use and get user input. In fact, the card users at this organization made suggestions for additional spending categories to be paid using the card. The result: the company exceeded its goals for the spend amount going through the card.

The goals of vendor management programs are both strategic and financial. Strategically, vendor management objectives are determined by overall business requirements. The financial objectives usually are to establish the percentage of spend to be brought under contract, and the savings goals mandated by financial management.

The acceptance of VISA cards at over 600,000 VISA merchant locations across Canada increases convenience to card users but also broadens the range of vendor management options open to organizations using VISA cards.

Vendor management features of VISA Commercial Card Programs include Merchant Category Code (MCC) blocking to prevent cardholder access to vendor categories that have been deemed to be high-risk - which is not simply a process improvement but can also result in cost savings.

"We're very satisfied with the savings we've realized as a result of expanding our VISA Commercial Card Program into new spending categories," says one customer. "I'm confident we'll be able to expand the program into new areas, further reducing our processing costs and increasing the savings we realize with our vendor base."

Generally speaking, a commercial card program can be strengthened by the simple step of requiring preferred suppliers to accept commercial cards as payment. Similarly, suppliers can be encouraged to accept virtual or "ghost" accounts, which are established so that transactions with one supplier or commodity type can be charged to one account. Two VISA customers surveyed for the 'Visa Procure-to-Pay Best Practices Study' have taken advantage of their purchasing power to mandate that their suppliers accept their cards.

Reviewing the rationale for card acceptance with suppliers helps to ensure that they buy in to the concept which in turn helps make it work more smoothly. One VISA client explains to suppliers that they will enjoy advantages too - such as 80 per cent faster payment turnaround.

The 'Visa Procure-to-Pay Best Practices Study' suggests some additional ways to increase acceptance of a VISA's Commercial Card Program:

• target large local suppliers that have recently implemented cards;
• develop a buying consortium to increase aggregate purchasing power, which will encourage supplier acceptance of cards; and
• mandate card acceptance early on, in the RFP or bid process, so that selected suppliers will understand that program acceptance is an integral part of the relationship.