2010 Purchasing Card Benchmark Survey Results
A Summary of the 2010 Purchasing Card Benchmark Survey Results
Richard Palmer and Mahendra Gupta, RPMG Research Corporation


Survey Overview

The 2010 Purchasing Card Benchmark Survey Results (the “Report”) provide a comprehensive analysis of the purchasing card market including trends, benchmark data, and variables that factor into program success.


Survey Respondents

The Report is based on over 1,900 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. All market sizes - middle, large, and Fortune 500 size - are represented in the Report. The age of respondents’ card programs vary from less than one year old to 15 or more years.


Purchasing Card Spend in North America

Between 2007 (the previous RPMG Research report year) and 2009, purchasing card spending in North America grew from $137 billion to $161 billion.  Corporate purchasing card spending growth in the past two years (14.9%) was lower than the Government and Not-for-Profit segment (20.5%).  Within the Corporate segment, Fortune 500 Size company purchasing card spending growth over the past two years was lowest (at 9.1%).  Large Market and Middle Market corporations reported 22.9% and 44.3% growth, respectively.  Among Government and Not-for-Profit entities, purchasing card spending growth over the past two years was lowest among Federal Government agencies (at 7.0%) and State agencies (10.3%), but notably higher among Cities and Counties (22.9%), Universities (20.2%), School Districts (26.7%), and Not-for-Profit organizations (24.7%). 

Between 2007 and 2009, organizational purchasing card spending increases were  driven primarily by increased card distribution  throughout the organization, increase in the amount spent per transaction, and the increased use of electronic Accounts Payable card accounts (non-plastic card accounts used to pay for invoiced goods and services).  Key growth categories for purchasing card usage include: transportation and delivery services, media and advertising services, print and duplicating services, and telecommunication services.  In addition, the traditional spend categories of office equipment, computer hardware, software and peripherals, and MRO goods continue to be common targets of purchasing spending.

Going forward, the predicted purchasing card growth is 9.1% for through 2010 and a 12% per year average over the next five years.  Annual purchasing card spending is expected to increase to $176 billion in 2010, $213 billion by 2012, and $255 billion by 2014.  In contrast to the past two years, Corporate respondents project an annual average purchasing card spending growth rate over the next five years (13.6%) that is higher than that projected by Government and Not-for-Profit respondents (10.6%). 

New Insights

As in five previous studies since 1998, this edition of the RPMG Purchasing Card Benchmark Survey Results examines best practices of \\\\\\\"high performance\\\\\\\" purchasing card programs and sheds light on continuing market trends, including card program management and control practices. The 2010 edition provides unique and fresh insight into emerging topics such as the use and spending patterns associated with both “ghost” and Electronic Accounts Payable card accounts, the use of purchasing cards outside of North America, the impact of integrating purchasing data into organizational databases, the use of card program assessment and optimization techniques, and supplier relationship issues. Finally, the Report offers many innovative suggestions from end-users on topics ranging from program management to technology.


Organizational Impact

The average administrative cost (including sourcing, purchasing, and payment activities) of a traditional Purchase Order-based process was reported to be about $93. For purchasing card transactions, the cost to procure and pay for goods was reported around $22. Thus, purchasing cards generated administrative cost savings of  about $71 per transaction when compared to traditional PO payment methods.  This translates into a transactional cost savings of more than $38 billion within North America on an annual basis. 

Further, in comparison to a traditional PO process, purchasing cards reduce the procurement cycle time by approximately 12 days, reduce the number of suppliers managed in Accounts Payable (AP) databases by an average of 16%, and generally result in a reduction or redeployment of staff in AP and Procurement functions. Twenty-six percent of all organizations report the use of purchasing card data to obtain a higher discount for goods or services. In terms of supplier relations, 49% of all organizations indicate that, over the past five years, suppliers who accept purchasing cards have increased their share of business with their organization above that of suppliers not accepting purchasing cards.


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: $1.8 million
•    Transaction size: $315
•    Monthly spend per card: $2,062
•    Number of transactions per card per month: 7

More importantly, the Report provides benchmark purchasing card program statistics by size of business, type of governmental unit, and industry category.  To purchase the complete report, go to www.rpmgresearch.net.
 

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