p-Card – Using Technology to Save Your School District BIG Dollars

It costs school districts money to spend money. Time, paper, postage, telephone, lost time caused by unnecessary interruptions, matching invoices, shipping orders, PO’s, etc, etc, etc. Research conducted by Deloitte Touche, American Express, Anderson Consulting, Illinois ASBO, GFOA and others indicates that the cost of processing a requisition through to payment AVERAGES between $75 - $200 EACH. This is regardless of whether the PO is for $10 or $1000. If you use a figure of $100, as a transaction cost example means that a $100 item really costs the district $200 plus shipping and handling. That’s a 100% markup. On larger purchases, say $1000, the $100 transaction cost represents a 10% markup plus shipping and handling. Research done specifically for Illinois consistently shows that between 58 – 60% of ALL accounts payable checks drawn during a year are for LESS THAN $500. This means that every one of these transactions is carrying an internal cost surcharge of 20% OR MORE. Using p-Cards for 60% of your transactions can reduce your per transaction costs to $10 - $40.

Here are some real examples: Naperville 203, in 2001, before they had their p-Cards issued 16,954 account payable checks. After three years of using the p-Card that number had dropped to 8,689 checks. This represents significant savings in time and money. During this same time period the number of PO invoices also dropped from 9,847 to 4,724. Again, this represents more savings for the school district. While the effectiveness and efficiencies in the business office are well documented, their use of the p-Cards generated rebates of over $19,000 in 2007.

In Havre, Montana, their record year of p-Card use saw the number of PO’s diminish from 3,000 to 500!

The bottom line is if you can eliminate 50% of your POs and reduce the cost of the other 50% by 40 – 60%, you have significantly increased the efficiency of your procurement/payment process. This is not theory – it is real!

Isn’t it time your school district started using the technology of ______ASBO’s state of the art p-Card program and benefit from its added values?

For information about ______ASBO’s p-Card program, contact ______at ___.___.____ or visit the website at www.illinois-pcard.com.

Updated 2016