The
2007 Purchasing Card
Benchmark Survey
Results
RPMG Research
Corporation
Authors:
Richard Palmer and
Mahendra Gupta
Survey
Overview
The 2007
Purchasing Card
Benchmark Survey
Report
("Report")
provides a
comprehensive
analysis of the
Purchasing Card
(p-card) market
including trends,
benchmark data, and
variables that
factor into program
success.
Survey
Respondents
The Report is
based on 1,238
responses from
Purchasing Card
end-users
representing public
and private
corporations, state
and federal
government, city
and county
government, public
and private
universities and
colleges, school
districts, and
more. Based on
respondents’
organizations sales
revenue, all sizes
of markets - small,
middle, and large -
are represented in
the Report. The
age of
respondents’
p-card programs
covered a range of
five categories -
from less than one
year old to seven
or more years, with
each category being
well-represented.
Purchasing
Card Spend in
North
America
Between 2005 (the
previous RPMG
Research report
year) and 2007,
p-card spend in
North America
grew from $110
billion to $137
billion. More
specifically,
average
organizational
monthly spending
increased by 24%,
driven primarily by
increased card
distribution
throughout the
organization and a
6% increase in the
amount spent per
transaction.
Overall, 80% of
respondents
reported spend
increases between
’05 and
‘07. In
particular, Middle
Market corporations
were the
front-runners,
reporting growth of
34%, while
government and
non-profit
organizations’
p-card spend grew
by approximately
20%. Key growth
categories for
purchasing card
usage include:
computers and
peripherals,
telecommunications,
printing and
duplication
services, media and
advertising
services, and
transportation and
delivery
services. In
addition, the
traditional spend
categories of
office products and
MRO goods continue
to be common
targets of p-card
spend.
The predicted
purchasing card
growth rate is 12%
per year between
2007 and 2012 to
reach $218 billion.
New
Insights
As in time past,
the Report examines
best practices of
"high
performance"
purchasing card
programs and sheds
light on continuing
market trends,
including card
program management
and control
practices.
The 2007 edition
provides unique and
fresh insight into
emerging topics
such as the use of
“ghost”
and electronic
Accounts Payable
card accounts, the
global use of
purchasing cards,
sales tax and 1099
trends,
integration with
e-procurement
software, the use
of card program
assessment and
optimization
techniques, and
supplier
relationship
issues.
Organizational
Impact
The average
administrative cost
(sourcing,
purchasing, and
payment
activities) of a
traditional
Purchase Order (PO)
process was reported
to be about $89.
For p-card
transactions, the
cost was reported
around $19. Net
savings: $70 per
transaction. This
translates into a
transactional cost
savings of more
than $34 billion
within North
America on an
annual basis. In
comparison to a
traditional PO
process, p-cards
reduce the
procurement cycle
time by
approximately eight
days, reduce the
number of suppliers
in Accounts Payable
(AP) databases by
31%, and generally
result in a
reduction of staff
for AP and
Procurement
functions. These
are just some of
the p-card benefits
cited by survey
respondents.
Benchmark
Averages
Benchmarking data
within the Report
covers a variety of
program outputs for
end-users to compare
their own programs
to. For all
respondents
combined, key
averages are:
- Monthly
spend per
organization: $1.6
million
- Transaction
size: $281
- Monthly
spend per card:
$1,834
- Number of
transactions per
card per month:
7
More important,
the Report provides
benchmark purchasing
card program
statistics by size
of business, type
of governmental
unit, and industry
category. To
purchase the
complete report,
please click on the
“Order
Research
Rpts” tab.
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