The State Purchasing Card Program has achieved great success being
recognized by VISA International in a 2004 nationwide study performed by Deloitte & Touche, which called West Virginia's program
"one of the nation’s best", having implemented 12 of the nation’s top 26 best practices.
The Purchasing Card is the preferred method of payment for the procurement of eligible goods and services. It offers agencies, boards and commissions an efficient method for streamlining the payment process. Employees of the State of West Virginia may obtain a purchasing card by contacting the purchasing card coordinator within their agency. Individuals must be trained and agree to follow Purchasing Card Policies and Procedures before a purchasing card will be issued.
The Purchasing Card Program offers agencies an efficient method of payment while continuing to meet established internal controls for the procurement and payment of goods or services. It reduces the volume of accounts payable transactions and the associated administrative costs by eliminating vendor invoices and consolidating multiple vendor payments into one monthly payment to the charge card vendor; suppliers are paid directly by the card issuer within three (3) business days.
For fiscal year 2010, the State Purchasing Card Program processed in excess of 636,000 transactions totaling approximately $365,000,000 with an average transaction amount of $573.50.
Studies obtained by the National Association of Purchasing Card Professionals estimate the transactional cost of the purchase order and payment process range from $50 to $250. By utilizing the purchasing card as a payment mechanism, the efficiencies provided result in savings ranging from 55% to 90% of this transactional cost. Using these estimates, the Purchasing Card Program for fiscal year 2010 netted the State of West Virginia between $17.5 million and $143.1 million in cost avoidance savings. The purchasing card provides additional savings beyond the cost avoidance savings previously discussed. These savings are from the following areas:
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Discounts on the cost of goods or services provided to the State directly attributable to prompt payment with the purchasing card.
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In past years, the State received a higher bond rating which saved additional monies because one of the main considerations to re-evaluate the State of West Virginia to a higher bond status was how obligations are paid in a timely manner. Specifically mentioned was the use of the State’s Purchasing Card.
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The State realized additional savings in the timely delivery of goods and services, directly attributed to prompt payment from the use of the purchasing card.
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The use of the purchasing card has allowed the State of West Virginia to become a better business partner. With its cost avoidance and prompt payment efficiencies, it is receiving additional interest from vendors desiring to transact business with the State. This allows the State of West Virginia to be more competitive in selecting business partners, most certainly allowing the State to be more selective when considering cost of goods or services and the timely delivery of such goods.
For the Purchasing Card Program to continue to maintain its high acclaim and cost avoidance savings, we must continue to have aggressive and ongoing monitoring in addition to appropriate individual agency requirements.