An interactive survey conducted for Visa this week found that the vast majority of purchasing managers believe they spend too much time and money processing corporate purchases.
About 100 managers of the 900 attending the National Association of Purchasing Management conference in Atlanta volunteered for the touch-screen survey, which gauged their interest in purchasing-card programs, as well as their views on macro-economic trends.
Of the participants, 93% reported their firms spend too much time handling small-dollar purchases, defined as under $5,000. And 86% said they spent too much money processing the transactions.
Visa Sees Need to Refocus
The informal survey suggests managers need to focus on reducing the costs associated with small purchases, said Robert Levaro, vice president of commercial products at Visa U.S.A. "There needs to be a way to reduce time and labor-intensiveness of this process."
Nearly half of the managers said administrative costs for a typical small dollar transaction exceeds $75.
"The administrative cost of these purchases is often as high as the purchase itself," Mr. Levaro noted.
Card Programs Stir Interest
Also, 58% said their companies were weighing using a purchasing-card program designed for business-to-business transactions of less than $5,000. The Visa purchasing card streamlines the process by eliminating the need for purchase orders, plus many settling tasks.
"With payment cards, purchasing professionals can focus less on paper pushing and more on negotiating better contracts for their companies where they can really add value," Mr. Levaro said.
Visa estimates the market for small purchases exceeds $300 billion each year, with the vast majority of payments made by paper. Visa says six financial institutions are issuing its purchasing card.
