Simplifying payments

The new Payment Card Solutions & Associated Services framework agreement has replaced the well-established Government Procurement Card programme.
    
Unlike GPC, which was contracted exclusively to Visa Europe and a consortium of Visa Member Banks, this new framework agreement has been awarded directly to a wider range of suppliers offering greater choice and flexibility in terms of product and service offering.
    
This approach continues the longstanding and successful relationship that Buying Solutions has with Visa Europe via the card Issuers, and also provides opportunities for greater competition by the inclusion of American Express and MasterCard related services.   
    
This new framework agreement has extended its scope and can now offer a choice of prepayment products (Lot 2) and web-based data integration solutions, Expense Management and associated services including VAT recovery and Data Mining services (Lot 3). It also meets Cabinet Office requirements for secure data handling.

What are GPCs?
Whether utilised as an entry-level eProcurement solution or an efficient method of payment, the GPC is a simple and effective business tool.
    
It provides a cost effective means of buying low value goods and services, typically removing 95 per cent of administrative effort. It enhances the standards of service delivery by making it simpler for employees to buy essential day-to-day items, like travel tickets, and guarantees on-time payment to suppliers. In short, the GPC is convenient, cost-effective, and a valuable contributor to efficiency targets.
    
GPC purchasing cards are issued to those empowered to purchase goods and services. This empowerment comes with accountability for their activities, supported by management information that provides details of every transaction. A clear audit trail exists for every user and all their transactions.

Benefits for the organisation
Most organisations purchase goods and services in support of their day-to-day business operations. As buying goods and services involves spending the organisation’s money, there clearly have to be checks and controls in those spending processes. Anything that reduces administration costs, releases money which can be used for improvements in the public service and produces a range of benefits for an organisation cannot be ignored. GPC benefits include:

  • Significant reduction in purchase order, invoice and transaction processing costs
  • Regular availability of management information which can be used to analyse an negotiate better prices 
  • Prompt payment to suppliers provides opportunities for negotiating price reductions or early settlement discounts 
  • One single consolidated payment to the GPC Visa Bank each month yields major reduction in administration 
  • Opportunities for negotiating reduced banking charges reflecting the lower numbers of transactions 
  • Improved accuracy of transactions (purchaser and supplier in direct contact) and easier reconciliation 
  • Reduction in disputes with suppliers – consumers deal direct with suppliers 
  • Clear and concise audit trails.

Benefits for suppliers
People are a valuable asset for any organisation. Anything that can be done to reduce administrative bureaucracy and spend more time on core activities provides both hard and soft benefits for an organisation.
    
Benefits to staff using GPCs include empowering staff to procure goods and services more efficiently as well as eliminating process delays and backlogs as staff can obtain the goods and services when they need them. The cards allow staff to be more focused on more productive work rather than administration by reducing paperwork and bureaucracy. Meanwhile, mobile staff can be released from the physical restrictions of formal paperwork procedures. It also gives staff greater visibility of expenditure in relation to budgets and staff no longer need to fund and reclaim expenses such as travel.

Benefits for suppliers
The GPC provides a win-win result for organisations and their suppliers in reducing administration costs, improving cash flow, and increasing customer satisfaction. Benefits include:

  • Suppliers receive payment typically within four working days (the norm is two to three days)
  • Suppliers have a direct relationship with the end users of the goods and services involved 
  • Suppliers invoicing administration burden is reduced and cash flow significantly improved because late payment and unpaid invoices are virtually eliminated 
  • The GPC can help stimulate the SME marketplace to do more business with more public sector bodies locally.

Benefits for the environment
Buying goods and services has some obvious, and some less than obvious impacts on the environment. Anything that can reduce the environmental impact and improve sustainability and save money is something that buyers and suppliers cannot afford to ignore.
    
Using the GPC as opposed to conventional paper based transactions can help lesson an organisation’s carbon footprint. Paperless transaction processing literally saves tons of paper every year (the average is 10 pieces of paper per transaction). And, by linking the GPC with internet based purchasing obviates the proliferation of paper catalogues cluttering up office space. In addition, management information can be translated into purchasing intelligence which can lead to smarter buying, less waste, and reduced impact on the environment.

For more information
Information taken from the OGC website: www.ogc.gov.uk

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