Contents 01

02
Introduction
03
This Year’s Progress
07
Statistics by Sector
08
Where is GPC Visa used?
10
The Efficiency Review
13
www.purchasingcard.info
14
Case Study: The Scottish Executiv
ive
iv
ve
15
Case Study: Kentn County
nt n Council
nty
16
Case Study: Edinburgh City Council
19
GPC Visa and Travel
20
GPC Visa and e-Procurement
21
The Sourcing and Buying Cycles
22
Quick Wins: Process savia ngs
avi
25
Quick Wins: Cost savi
a ngs
avi
26
Frequently Asked Questions
28
Contacts
Introduction 02 This Year’s Progress 03

Last year we were able to celebrate the milestone of GPC Visa continues to be an essential tool in the public 80.7

over £1 billion of cumulative spend on the Government sector’s drive for efficiency savings. In 2005 GPC Visa has
64.8
Procurement Card (GPC Visa). This year we can celebrate continued to transform the purchase to pay cycle across the
over £1.5 billion in cumulative spend on GPC Visa. Last public sector from the smallest organisations through to the 49.8
year the spend on GPC Visa equalled fifty per cent of largest central government departments. All the indicators,
35.9
the previous seven years and we now have over 500 from statistics on the number of cards issued to the number
programmes and 70,000 card holders. The success of of transactions made, demonstrate the importance and value 19.1
GPC Visa surely dispels any concerns that procurement of GPC Visa to the public sector. 11.7
cards may not be a suitable tool for use in the UK public 0.8
4.6
sector. The question we should be asking ourselves Figure 1 (right) shows the estimated savings gained from the 1998 1999 2000 2001 2002 2003 2004 2005
now, is not ‘should we use GPC Visa?’ Instead we use of GPC Visa for each year since its inception, as with all Fig.1: Overview of Annual Savings (£ milions)
savings calculated using the NAO approved figure of £28 saving per transaction
should be asking ‘why are we not using GPC Visa?’ previous years, the figures for savings continue to grow
year on year. 527.3
GPC Visa confirms that best practice business processes
and excellent software solutions can be used to deliver Looking at this data it is clear that GPC Visa has had a 404.8
efficiency benefits across all areas of the public sector. significant effect on public sector procurement. 2005 saw
304.5
The three case studies in this report show that GPC Visa a further £80,723,272 saved due to increased usage of
is not just a tool for purchasing simple commodities, GPC Visa, with much of these savings being available for 208.4
but can also be used in more advanced procurement redistribution to frontline services. The rate of savings has
122.3
areas. This year, as with previous years, we continue increased in line with expectation as public sector bodies
61.2
to see new and innovative uses for the card. In 2005, use GPC Visa as a tool for meeting the requirements of the 3.2 19.7
GPC Visa programme managers have delivered increased Efficiency Review. 1998 1999 2000 2001 2002 2003 2004 2005
efficiency within financial departments, better contract Fig.2: Overview of Annual Spend (£ milions)
compliance and improved service delivery for vulnerable 2005 in figures
citizens relying on social services for support. No. of GPC Visa schemes in operation: 526
No. of GPC Visa cards in use: 70,078
What might appear to be a simple purchasing card, is in Total spend on GPC Visa cards: £527,287,340
fact an extraordinarily powerful and flexible tool that has No. of transactions on GPC Visa: 2,882,974
delivered savings of over £80m for the UK public sector. Average spend per transaction on GPC Visa: £182.90
GPC Visa is an example of the success that can be achieved Monetary savings: £80,723,272
when Government and the private sector work together. Paper savings: 28,829,740 sheets of A4 paper
Using the experience and expertise of the private sector
to design, implement and monitor the GPC Visa programme The eighth year of GPC Visa has seen its usage continue to
has allowed the public sector to focus on improving grow at a remarkable pace. For the first time in eight years
processes and services for the benefit of citizens. the annual spend has passed the half a billion pounds mark.
In addition to this record, for the third consecutive year an
As the GPC Visa programme matures so does the imperative additional £100 million has been spent on GPC Visa against
to make use of this valuable tool. The challenge to make the previous year (see Fig.2 right). Given the importance
our public services more efficient is a significant one, placed on modernisation in the public sector procurement
GPC Visa is surely one of the easiest routes to delivering agenda it is expected that this accelerated growth
increased efficiency for the public sector. Therefore I urge will continue.
all public sector organisations to make full use of GPC Visa.

John Oughton
April 2006
 This Year’s Progress 04 Technology
Continued
GPC Visa can work
with a full range of e-Procurement
technologies

This year saw the pattern of monthly spend not only 46.7
48.9 48.2
50.1
47.4
45.9
increase but become more consistent throughout the year 41.6
43.4 41.7 42.8
39.3 39.4 40.3
(see Fig.3 right). Whilst seasonal slow downs in spending 36.3 35.2
38.7
33.3
were still evident in January, May and August 2005, the 31.4 32.6 32.5
29.1
32.6 32.7

scale of these reductions in spend were less marked. The

21.9
average monthly spend was up £10 million on last year to
almost £44 million per month. These figures reflect the fact
that GPC Visa continues to provide the public sector and
their suppliers with a regular and reliable means of payment.
It is clear that to some organisations using GPC Visa is now Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
‘business as usual’. Spend 2004 Spend 2005
Fig.3: Comparison of spend by month in 2004/2005 (£ milions)
Figure 4 (right), illustrates the relationship between the
2,883
growth in programmes and the growth in the number of 526
transactions. In line with expectations, as the number of 2,317
424
programmes increases year on year so do the number of
transactions made. In the limited time the second
1,778
GPC Visa contract has been running there has been a stable 277
1,285
relationship between the number of programmes running 683 212
189
and the number of transactions being made. 419
121
165
55
In addition, whilst the number of transactions made using 28
12
GPC Visa has grown, so too has the average transaction 1998 1999 2000 2001 2002 2003 2004 2005
value (see fig.5 right). Whilst we understand that the Transactions (thousands) No. of programmes
transaction value will never grow exponentially, there is an Fig.4: Total Programmes and transactions by year
expectation that the value of transactions will continue to
2,883
increase. In the long term it is anticipated that increase in 683
1,778 2,317 182
179 1,285 174
the average value of transactions will eventually align with 419 162
171

inflation. It is also encouraging to see GPC Visa being used 146

165
with more confidence for larger purchases. 28
119
114

Looking ahead
As part of the Efficiency Review, Buying Solutions have set
an aspirational target of £4.5bn spend to be placed through
GPC Visa. If GPC Visa usage continues to increase at its
current rate of growth, the target will be met by the December
1998 1999 2000 2001 2002 2003 2004 2005
2008 deadline. This is not to say, however, meeting the target
Transactions (thousands) Average transaction value (£)
is a foregone conclusion; in order to sustain the current rate Fig.5: Average transaction value and number of transactions
of growth, not only do more organisations need to implement
GPC Visa but those that have begun to use it need to further
develop their implementations and look for new areas of
spend for the card.
Emergency Services Statistics by Sector 07

GPC Visa is used

by emergency services for flood
and disaster relief

Central, Civil & Defence Local Government Health Higher Education Total
Total Spend on GPC Visa £463,444,466 £30,392,400 £22,572,057 £10,878,417 £527,287,340
Total Transactions 2,533,907 161,382 104,307 83,378 2,882,974
Total Cards 59,558 5,643 2,924 1,953 70,078
Total Implementations 307 130 37 52 526

Table 1: Breakdown by sector

Central, Civil & Defence Local Government Health Education Total

% of 2005 Resource Budget* 48.50% 16.10% 26.20% 9.20% 100.00%
% of Total GPC Visa Spend 87.89% 5.74% 4.28% 2.09% 100.00%

Table 2: Percentage of GPC Visa spend vs percentage of national resource budget

*Treasury financial statement and budgetary report 2005

Central, Civil & Defence Local Government Health Higher Education Total
Savings** £70,949,396 £4,518,696 £2,920,596 £2,334,584 £80,723,272
% of Total GPC Visa Savings 87.89% 5.60% 3.62% 2.89% 100.00%
% of Total GPC Visa Spend 87.89% 5.76% 4.28% 2.06% 100.00%

Table 3: Savings and spend percentages by sector

**Savings calculated using the NAO approved figure of £28 saving per transaction

It is evident from the breakdown by sector (see table 1
above) that, to date, GPC Visa is a more established method
of payment in the central, civil government and defence
than other areas of government. This is partly attributable to
the fact that in the first GPC Visa contract (1997 – 2003) the
card was only available to central government departments
and the Ministry of Defence. It is also noticeable that whilst
there are less than three times as many central, civil and
defence implementations as there are local government
schemes, they spent fifteen times as much on GPC Visa
than local government. This has to be taken in context of
organisation’s relative budgets, but it does suggest that
there is a significant amount of scope for expansion of the
local government implementations already in existence.
areas of government. The potential for greater use is true of
the health sector where the relationship between spend and
savings could be improved (see Table 3 above).
Table 3 details the savings made by each area of government.
This is linked to the number of transactions made and as such
holds no real surprises. If the percentage values are studied
independently, it would appear that higher education
GPC Visa programmes are out-performing health programmes
in terms of their savings to spend ratio. However, the average
transaction value is over £80 greater in health programmes;
suggesting very different uses of GPC Visa.

Table 2 makes a comparison between the percentage

of the 2005 resource budget spent on each sector and
the percentage of total GPC Visa spend contributed by
each sector; again the inequality in use across sectors
is highlighted. Whilst it is not surprising that a greater
percentage of spend rests in central, civil government
and defence, it is not unreasonable to expect a comparative
percentage by budget. These shortfalls serve to highlight
the task facing other areas of government in their use of
GPC Visa, and the potential for greater use across other
 Where is GPC Visa used? 08 Where is GPC Visa used? 09

% of Total GPC Visa spend The use of GPC Visa for the purchase of travel has always Programme managers looking to increase the usage of
Merchant Category Descriptions Central Government Local Government Health Higher Education All Sectors been strong, however, we expect that the growing GPC Visa in specific categories can follow the approach
(+others)
popularity of internet transactions will see an increase outlined in the Quick Wins diagrams (pages 22 and 25)
Auto Rental 0.80% 0.42% 0.23% 0.51% 0.78% in spend across other categories. We expect that these to address the issue.
Automotive Fuel 0.48% 0.33% 1.56% 0.23% 0.47% increases will see the percentile values for travel reduce as
Books and Periodicals 0.78% 0.80% 1.72% 2.43% 0.83% programmes mature. The internet has enabled transactions
Building Materials 2.89% 8.33% 0.17% 2.88% 3.12% for easily cataloguable items such as Stationery, Computer
Building Services 0.50% 19.13% 0.12% 0.66% 1.30% Equipment and Building Materials, and we expect to see
Business Clothing and Footwear 0.37% 0.37% 0.00% 0.30% 0.37% significant increase in spend for these categories over the
Catering and Catering Supplies 0.51% 5.27% 0.50% 0.45% 0.72% coming year. Increased spend should also occur in categories
Cleaning Services and Supplies 0.34% 0.41% 0.24% 0.26% 0.34%
such as Books and Periodicals, and Training and Education,
Clubs/Associations/Organisations 0.43% 6.03% 0.83% 2.11% 0.71%
where internet transactions for such goods and services are
already commonplace.
Computer Equipment and Services 4.15% 5.18% 14.50% 7.27% 4.30%
Estate and Garden Services 0.37% 0.36% 0.16% 0.34% 0.37%
It is only possible to make a limited comparison of
Financial Services 0.07% 0.06% 0.88% 0.12% 0.07%
percentage spend across sectors, as it is necessary to
Freight and Storage 0.23% 0.09% 0.01% 0.22% 0.23% work on the assumption that each sector has the same
General Retail and Wholesale 8.90% 11.99% 11.12% 10.77% 9.09% proportional spend in each category to achieve this. In the
Hotels and Accommodation 10.29% 5.53% 14.52% 11.49% 10.12% case of Building Services this is clearly not the case, as the
Leisure Activities 0.86% 0.65% 1.00% 1.02% 0.85% requirement to maintain housing stock will require local
Mail Order / Direct Selling 1.03% 0.72% 0.32% 0.93% 1.01% government to spend a significantly higher proportion of its
Mail Order and Courier Services 2.40% 1.67% 1.14% 5.48% 2.44% budget in this category than in the other sectors. However,
Medical Supplies and Services 0.78% 3.56% 0.38% 2.05% 0.93% the data can be used as an indicator to flag where sector
Miscellaneous 0.11% 0.76% 0.13% 0.03% 0.13%
programmes may be able to increase their use of GPC Visa.
Miscellaneous Industrial/Commercial Supplies 6.43% 5.55% 1.80% 5.34% 6.35%
Therefore it is worth investigating the seeming lack of spend
in Building Services and Vehicles Servicing in the health
Office Stationery Equipment and Supplies 20.43% 5.35% 1.88% 9.65% 19.46%
sector and Office Stationery and Temporary Recruitment
Personal Services* 0.06% 0.07% 0.01% 0.03% 0.06%
in local government. There may be a good reason for this,
Print and Advertising 1.85% 0.64% 1.16% 1.48% 1.79%
however, the statistics would suggest that these are areas
Professional Services 1.86% 0.99% 0.66% 2.36% 1.83% worth exploring for further savings.
Restaurants and Bars 1.56% 1.43% 5.38% 1.84% 1.57%
Staff – Temporary Recruitment 2.63% 0.05% 0.00% 0.04% 2.45% As the Edinburgh City Council case study (page 16)
Statutory Bodies 0.27% 0.44% 0.34% 1.33% 0.31% illustrates, payment by GPC Visa is an ideal tool for
Telecommunication Services 0.51% 0.48% 0.31% 0.42% 0.51% purchasing Building Services and Building Materials.
Training and Educational 1.51% 0.77% 0.65% 3.51% 1.52% Using GPC Visa is an excellent way to ensure the
Travel 24.92% 9.12% 36.90% 23.24% 24.22% management of works is not hindered by lengthy paper
Utilities and Non Automotive Fuel 0.28% 0.47% 0.08% 0.18% 0.28%
processes, unnecessary journeys and late payment for
Vehicles Servicing and Spares 1.40% 3.00% 1.29% 1.05% 1.46%
suppliers. The case study provides a clear example of how
GPC Visa can be used in these categories. Programme
Table 4: Merchant category data managers in all sectors should take note of how this
These figures have been compiled from the data available at the time of going to press.
The figures should not be taken as a definitive breakdown of the GPC annual spend 2005. programme is being run and investigate the opportunity for
* Personal Services cover services such as counselling, childcare, investigative services and
using GPC Visa in the same way within their organisations.
funeral and crematorium services..
The Efficiency Review 10 Press

GPC Visa is
regularly used to pay for press
and advertising

The Efficiency Review provides public sector bodies with
an opportunity to improve their services to citizens. The
Efficiency Review is not based on cuts, therefore each part
of the public sector has the chance to look at the way they
deliver services and redesign the delivery where possible
to become more efficient. One part of the Efficiency Review
does however, require public sector bodies to make cost
savings, which will be generated by spending less for the
goods and services each organisation uses. Organisations
will be required to detail how much money has been
saved through spending less. For the purposes of the
Efficiency Review, these savings are referred to as cashable
efficiencies. All the money accrued in cashable efficiencies
will become available for investment by the organisation
making the savings.
A second part of the Efficiency Review focuses on the
need to provide better services to citizens, which is
referred to as non-cashable efficiency. Much of this
efficiency will be achieved by ensuring that less time is
spent on administrative tasks and more time is being spent
on delivering services to citizens. The key to non-cashable
efficiency is increasing the amount of time staff spend
on tasks that are ‘out-facing’ or citizen focused. Increasing
time spent on these tasks could mean for example a
planning officer spending more time handling planning
applications or a junior doctor spending more time attending
to patient needs. Achieving non-cashable efficiency is a
matter of enabling staff who deliver services to citizens to
be more effective. This can be achieved by reducing the
administrative burden and using the time freed up
to support them as they deliver services to the citizen.
GPC Visa they can achieve significant savings. Furthermore,
with GPC Visa, organisations can have increased visibility of
their procurement spend to help identify when buyers are
using contracts or not. Therefore, using GPC Visa to access
framework contracts will help buyers to generate genuine
cashable savings.
To date, the organisations that have generated the most
savings from the use of GPC Visa have taken the time
savings from not having to process invoices to support front
line services instead. Using GPC Visa and additional third
party software means that data can flow directly from the
files provided by the card issuing bank into an organisation’s
finance system. GPC Visa removes the need for staff to
check paper invoices and approvals and then re-key the data
into the finance system. This work can be highly repetitive
and many organisations use temporary staff to complete this
task, using GPC Visa can reduce this burden and allow staff
to focus on tasks that are essential for delivering services.
GPC Visa can help organisations of any size deliver improved
efficiency, it is scalable enough to be part of an efficiency
drive in a small organisation or the sole platform for an
efficiency drive in a large organisation. Any organisation
seeking to deliver efficiency should utilise this technology
to help them deliver better services to their citizens.

GPC Visa is at the cornerstone of public sector efficiency

as its use can deliver both cashable and non-cashable
efficiencies. GPC Visa can be used by organisations to
access contracts with better prices and can improve the way
suppliers do business with the public sector. Suppliers such
as Argos and Comet are prepared to offer discounts of 5%
and 10% respectively to GPC Visa holders. This is because
they know that they will receive payment in a timely
fashion and won’t have to cope with a burden of paper and
the associated reconciliation tasks. Cashable savings can
be realised by using framework contracts negotiated on
behalf of the public sector such as those offered by Buying
Solutions. If buyers access these framework contracts using
Paper www.purchasingcard.info 13

GPC Visa has

saved nearly 29m pieces of A4
paper this year

In collaboration with Visa Europe and Buying Solutions,
Purchasing Card Consultancy Ltd (PCCL) have developed the
GPC Visa benchmarking website which can be found
at www.purchasingcard.info. This site provides a number
of resources to help public sector bodies and their suppliers
better understand the benefits GPC Visa can achieve and
how to make the most of a card programme once it is in
place. The site also covers a range of valuable information,
including news, contacts and case studies.
A key part of the website is the benchmarking tool. This
is an interactive tool to help buyers and suppliers identify
how much time and paper they can save by using GPC
Visa. Either as a buyer or a supplier; users of the tool can
allocate time to the duration spent on common procurement
tasks, such as raising an order or approving an invoice for
payment. Users allocate times for common procurement
tasks using the conventional paper process, and a time
for the equivalent procurement task if they were using a
GPC Visa. The timings for the tasks and other factors are
multiplied out by the number of invoices to provide a figure
for the amount of time that can be saved using GPC Visa
across a whole organisation. The benchmarking tool is based
on sound experience and compares vital data to help buyers
analyse the genuine savings that can be made using GPC
Visa, including detailed reports on the savings available to
the organisation.
data are listed on the database. The website is continually
growing and will include details of suppliers that can be used
by the public sector to improve procurement efficiency.
To help public sector organisations identify the suppliers
who accept GPC Visa, the website will also include a function
that will allow buyers to upload a list of common suppliers
that can be cross-referenced against the suppliers in the
database. This service will allow users to generate a list of
the suppliers being used by an organisation that also accept
GPC Visa, including the level of data they provide. To help
Visa Europe and Buying Solutions provide a high quality
service to GPC Visa users, data on common suppliers will be
analysed by PCCL to identify the suppliers who appear most
often in individual lists. Therefore it will be possible to see
if a number of organisations are checking specific suppliers
to see if they are already a Visa merchant. If they are not,
it will be possible for Buying Solutions to approach these
frequently requested suppliers to formally request that they
become either a merchant or to increase the level of data they
provide. In the interests of security, all retained data is held
anonymously and no attributable data is being kept.

However, the value of the reporting generated by the

Benchmarking Tool depends on the accuracy of the data that
is entered into the system. Therefore, for the best results it
is essential to research the procurement procedures within
your organisation before using the tool. Staff should have
key facts to hand, including timings of key tasks and the
amount of invoices and orders that are being processed
per annum. Organisations that are prepared to take time to
gather accurate data on their procurement processes will be
able to use the tool to create a fully formatted and usable
business case.

As well as the benchmarking tool, the website includes a

database of suppliers to the public sector that will accept
payment by GPC Visa. Each entry includes address and
contact data for the supplier as well as the data level that
they can provide when making a purchase. At the time of
writing this report, only suppliers providing level 2 or 3
 Case Study
The Scottish Executive
Introduction
The Scottish Executive is the devolved government for
Scotland. It was established in 1999 and is responsible for
most of the issues of day-to-day concern to the people of
Scotland, including health, education, justice, rural affairs,
and transport.
The Scottish Executive manages an annual budget of
more than £20 billion, of which £6 billion is used to fund
the departments and executive agencies of the Scottish
Executive itself. Of this, £65 million is spent on transactional
purchases required to run the central departments of the
Scottish Executive, the Executive agencies and other non-
departmental public bodies on a day-to-day basis. This
results in over 200,000 purchasing transactions each year
with over 6000 suppliers.
Using GPC Visa
In December 1999, the Scottish Executive set up a project
team to consider how the purchasing of lower value, one off
items could be streamlined using GPC Visa. Their objectives
were to:
Provide a cost effective means of purchasing goods and
services with a value below £600.
Enhance standards of service delivery by making
it easier for employees to buy essential day-to-day items.
Allow prompt payment of suppliers.
The Scottish Executive implemented a pilot scheme for
GPC Visa. This pilot proved that GPC Visa could meet the
objectives outlined above and provided the mandate to
roll out GPC Visa without delay. By the end of 2005, 990
cards had been issued and 2005 saw £5,140,218 spent
through the system.
Benefits:
Some of the benefits identified by the Scottish Executive
have included:
Savings in process costs estimated at £125,000 annually.
Savings in time spent putting one-off suppliers onto the
Scottish Executive Accounting System – these savings
are estimated at £10,000 annually.
Ease and speed of purchasing for budget holders making
purchases using GPC Visa, leading to better service to the
people of Scotland.
14
More effective control of expenditure, thanks to
comprehensive management reporting from
Visa Europe.
Prompt settlement for suppliers, helping the Scottish
Executive to meet Government targets for
prompt payment.
Moving forwards
GPC Visa has proved so successful for the Scottish Executive
that it has since played a key role in the Scottish Executive’s
e-Procurement initiative –’e-Procurement Scotl@nd’. For
more information on e-Procurement Scotl@nd please visit
www.eprocurementscotland.com.
Tom Wilson of the Scottish Executive says of the
GPC Visa scheme:
“The Scottish Executive has a well developed GPC Visa
programme for physical cards. Simplicity and ease of the use
is the key for low value purchases. It is important to realise
where things fit, the physical GPC Visa card is the most
effective payment tool for low value payments.”
Contacts
Scottish Executive
eprocurementscotland@scotland.gsi.gov.uk
Tom Wilson
tom.wilson@ogcbs.gov.uk
Case Study 15
Kent County Council
“The knock-on
effect of this system is improved cash
flow for our suppliers while at the same
time not impacting on Kent’s cash
flow” JeremyBlackman
Introduction No need to manually check every invoice, freeing up
Kent County Council is one of the largest councils in the administration staff to concentrate on crucial frontline
UK and has over 70 suppliers providing services to 36,000 care work.
adults living at home including 19,000 elderly people, and Less need to audit retrospectively.
those with mental and physical disabilities. Oliver Mills, Significant reduction in the council’s financial
Managing Director Adult Services, explains Kent’s priorities administration costs.
as “firstly, to enhance the quality of life for individuals in the
county boundary and, secondly to streamline our processes Moving forwards
and ensure that everything is managed in the most cost TDM is a very effective solution to Kent’s social care
effective manner.” invoicing issues. Kent’s priority now is to identify other
areas of business where the TDM approach can be
Social care payments are considered a difficult area to implemented as part of their e-procurement strategy.
automate as care work is billed by the hour so there is no
fixed price for a service or product. In order to cope with Jeremy Blackman of Kent comments on the project:
this, any procurement system needs to be flexible enough “The result is a system which guarantees payment for
to cope with any anomalies whilst still maintaining the suppliers within four days through GPC Visa, as opposed
necessary levels of control and checking required of any to the former 30 day payment terms, where invoices were
payment system. Kent’s goal was to identify and implement manually processed on a monthly basis. The knock-on effect
a system that would reduce bureaucracy and costs, whilst of this is improved cash flow for our suppliers while at the
being flexible enough to handle social care payments. same time not impacting on the council’s cash flow, as Kent’s
statements from the bank still arrive at the end of each
Using GPC Visa month, and cover all suppliers on the same statement.”
The council selected a GPC Visa solution that they felt would
best fulfill their requirements. The proposed solution was Contacts
to use an embedded, ‘virtual’ Visa purchasing card coupled Kent County Council
with Transaction Data Matching (TDM) software. TDM is Nick Vickers
an automated payment and data matching solution that nick.vickers@kent.gov.uk
uses an organisation’s existing accounting and ordering
systems, and provides completely automated payment and
data reconciliation, without reducing management control.
Buyers’ order details are electronically reconciled to a virtual
GPC Visa payment that is generated automatically, and then
delivers electronic files to the buyer’s finance systems to
automate cost allocation. The system is designed to deal
with anomalies and inconsistencies, in these instances it will
complete the payment but produce a ‘variance’ report which
flags the payment for attention.
Benefits
Some of the benefits identified by Kent County Council
have included:
Guaranteed payment for suppliers and care providers
within four days whilst not impacting on the council’s
cash flow.
 Case Study
Edinburgh City Council
Introduction
‘Supporting safe buildings in our community.’ This is the
mantra behind City of Edinburgh Council’s latest initiative
to improve public safety in and around all of the buildings
within its remit. As the only council in Scotland that has
unique legislation to enforce repairs on private property, it
has a very active property conservation section, responsible
for monitoring the condition of buildings in the city and
organising maintenance work where required. In line with
this concern for safety, City of Edinburgh Council is also in
need of a robust and streamlined payments system behind
the scenes, in order to ensure that repairs and works can be
carried out quickly, efficiently and with the minimum
of bureaucracy. The council carries out approximately 2,000
projects of this nature a year, amounting to approximately
£13 million of spend and generating 14,000 paper invoices.
In light of this, the council set itself three goals in developing
a new process:
To pay contractors as quickly as possible.
To have a transparent, simple process through which to
track invoices.
To have a ‘paperless’ back office.
Using GPC Visa
City of Edinburgh Council has developed a solution to
this problem through the use of a GPC Visa card. They
have created a bespoke solution using an embedded Visa
purchasing card and Transaction Data Matching (TDM)
software that addresses the issues specific to the
council’s needs.
The TDM solution is based around a website onto which
every project and contract is loaded. Works orders are also
issued through the website and each contractor is able,
through a secure log in, to access the purchase order. The
contractor is then able to issue an invoice from the purchase
order and track its progress. The council officer dealing
with a particular project is able to log into the site to see the
invoices as and when they are raised. Through the website
it is possible to approve the invoice for full immediate
payment using the embedded card or, in the event of an
anomaly, amend the invoice, pay an appropriate amount
and arrange to discuss the issue with the contractor ‘offline’.
Contractors were invited to a training seminar to explain the
new process and how it would impact on them. The feedback
16 Medical Supplies
GPC Visa is used to
buy medical supplies in hospitals
from the seminar and subsequent use of the system has
suggested that the system is so easy to use that it would
be possible to conduct future training over the phone.
Benefits
Some of the benefits identified by Edinburgh City Council
have included:
Cash flow for the contractor is dramatically improved.
Relationships with contractors have been vastly improved.
Unnecessary administration time has been cut, allowing
staff to be redeployed to front line services.
Staff workloads are easily monitored and work can easily
be reassigned as a result of illness or leave.
Moving Forwards
It is intended that the system will be continually refined to
make it more intuitive and add increased functionality. The
ability to upload pdf files for contractor’s records is currently
being investigated.
One of Edinburgh’s major contractors, G.Grigg and Sons,
says of the system:
“We have found the system, even from the outset, to be
very efficient, easy to understand and extremely effective
in processing the payment. The previous system was
extensively paper and postal based and this, coupled with
unduly extensive payment periods, proved to be frustrating.
The new payment system has broadly eradicated the
previous problems and has contributed to a widely more
efficient payment system which has greatly improved our
overall cash flow.”
Contacts
Edinburgh City Council
Tim Rayner
tim.rayner@edinburgh.gov.uk
Travel GPC Visa and Travel 19

35% of GPC Visa

spend is on travel and hotels

All organisations need some of their staff to travel and
the UK public sector is no exception. The management of
travel expenditure can be greatly simplified by the use
of GPC Visa. Travel and subsistence (T & S) schemes can be
established using GPC Visa, these are schemes specifically
for travel and provide benefits in the following areas:
A GPC Visa T & S scheme can give organisations full visibility
of the suppliers they use for travel. This visibility can in
turn drive compliance, as procurement staff can ensure
that buyers use the suppliers who are offering preferential
rates to public sector staff, or to a contracted supplier
offering a specific rate in accordance with a framework
contract. It is estimated that nearly £3bn is spent on travel
and subsistence in the public sector each year, and with the
demands for travel increasing in the public sector* the need
for managed procurement in travel is ever more important.
the organisation visibility of the spend to ensure that
spend is appropriate and compliant and does away with
the traditional reimbursement process. GPC Visa almost
completely does away with the need for cash and written
cheques on T & S spend.
GPC Visa cards provide the carrier with insurance and
security protection. Issuing banks provide a range of
services to cover against travel inconvenience including
delayed baggage and delayed travel. Security controls will
protect against fraudulent use of the card if lost or stolen
whilst on business and spend limits can ensure that card
holders are restricted in their monthly and transactional
spend and the types of suppliers they use the card with.
* Barclaycard Business Travel Survey, January 2006

Increasingly travel is being bought through internet

sites; rail, air, hotels and taxi needs can be pre-arranged
and paid for online, making buying more efficient and
allowing individual buyers to time their transactions to
gain the benefit of early pricing. Organisations who don’t
use purchasing cards will often find their staff paying for
travel and subsistence using their own credit cards and
reclaiming the money later. Access to GPC Visa allows staff
to make bookings for their work travel needs without time
consuming paper processes. Approvals can still be sought
and recorded if needed, but payments and ticketing can be
managed by the individual, ensuring that less time is wasted
on workflow and bureaucracy.

Staff required to pay for their own travel and subsistence

will inevitably have to engage in the attending paperwork
and processes required to ensure compliance with
reimbursements. These tend to be lengthy and time
consuming both for finance staff and for the staff who
have made the purchases. Missing receipts can also cause
problems as staff are not able to recover legitimate costs
raised on behalf of the organisation. The alternative to
reimbursements is cash, given the lack of control this
offers to organisations, and the attendant risks, there is
understandably a strong desire to limit the amount of
cash issued to staff to manage their T & S needs. GPC Visa
allows staff to pay suppliers at the point of purchase to
cover all their T & S needs, and at the same time gives
 GPC Visa and e-Procurement 20 The Sourcing and Buying Cycles 21

The diagram opposite (Fig.6 right) shows that GPC Visa GPC Visa and suppliers Analysis to management:
can play a crucial role in the buying cycle. Supported Bringing suppliers into an e-procurement initiative can be a The sourcing cycle
by reconciliation and approval software GPC Visa can challenge, as it can appear to be both costly and technically Requisition to payment:
ntract
automate the buying cycle from approval through to demanding for suppliers, this is especially true of SME and The buying cycle anage co Suppl
ier a
payment. However, whilst GPC Visa will also influence an BME suppliers. Over 825,000 suppliers in the U.K. accept dm naly
itor an sis
organisation’s sourcing cycle and the early parts of a buying GPC Visa, which is an easy and attractive way for them n
cycle, it cannot modernise all of the procurement activity to conduct business with public sector bodies. Suppliers Mo
Ident
in an organisation. To achieve this it will be necessary to choosing to take GPC Visa expand their payment routes to ent ify n
consider a wide range of e-procurement technologies and a wide range of potential customers outside of their existing e paym eed
k
develop an e-procurement strategy. GPC Visa will form an client supplier relationship. The cost of becoming a Visa Ma
integral part of this strategy. merchant can be significantly less than engaging with a
single e-procurement initiative. GPC Visa can therefore offer isa
The task of modernising procurement is not simply a case an attractive option to organisations looking to transact with PCV
G

Sp
of selecting technologies to solve individual problems more suppliers through marketplaces and other

end
and implementing them. GPC Visa and other procurement e-ordering solutions.

ct

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technologies should be considered in the wider context of

ate

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technologies that can interact with each other to deliver It is clear that GPC Visa, when used as part of an

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improved efficiency and contract compliance. As GPC Visa e-procurement strategy, is actually an assistance and an

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is such a flexible tool, it can work with a full range of enabler to e-ordering and marketplace initiatives. Far from

isitio
Recei
e-procurement technologies to enable a larger number being threatened by e-procurement, GPC Visa is a key

n
of suppliers, to lower the cost of entry into e-procurement technology for use in conjunction with e-procurement
and to help public sector bodies engage with small and technologies. For further information on marketplaces and
medium enterprises (SMEs) and black and minority the different e-procurement technologies please contact the

Negotiate auc
enterprises (BMEs). Buying Solutions helpdesk (contact details can be found on
the last page of this report).
GPC Visa and e-marketplaces
Marketplaces allow a number of different organisations

ion
to access catalogues and contracts collectively. Remotely

eria
tion c

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hosted contracts are accessed through either a web browser

t crit
or the existing systems to allow buyers to order goods

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and make payments. However, for payments to be made

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between buyer and supplier using a marketplace, the buyer

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needs to have integrated the marketplace with their finance
(BA

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system and the supplier needs to be able to receive orders

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electronically. Using marketplaces in conjunction with FO

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GPC Visa can allow organisations to utilise the collaborative )

Es
power of marketplaces without the challenge of integration. Se
nd
ord
Buyers using the marketplace to view catalogues and raise er t order
orders, can then make payments to suppliers using o supp ase
GPC Visa. In some cases this also lowers the cost of access lier ate purch
Cre
to the marketplace as some providers offer a ‘catalogue view
only’ license. Qu notice
alif der
y su Ten
pplie
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Fig.6: The Sourcing and Buying Cycles
© Ticon UK Ltd 2005
Quick Wins 22 Mobile Telephony
Process Savings
GPC Visa is regularly
used for mobile telephony and
data contracts

Fig.7: Quick wins – process savings

GPC Visa reduces inefficiency in the buying process.

Using GPC Visa means that staff whose job it is to complete
these inefficient processes can have their time freed by
using GPC Visa. The time can then be allocated to more
value adding tasks for the organisation. Alternatively an
organisation can choose to hire fewer temporary staff or
not to hire additional staff to manage inefficient buying
processes. The more GPC Visa is used the more staff time
can be reallocated. Figure 7 (above), is a ‘quick wins’ guide
to the best way to implement GPC Visa in place of inefficient
buying processes.
Temporary Staff Quick Wins 25
Cost Savings
Temporary secretaries,
nurses, legal and kitchen staff have been
hired using GPC Visa

Fig.8: Quick wins – cost savings

GPC Visa can also reduce costs. In figure 8 (above), part 1
describes how GPC Visa programme managers can identify
immediate savings from the use of GPC Visa. It is tempting
to think that the public sector don’t use suppliers like Argos
and Comet, but in fact a large amount of public sector spend
goes through these suppliers. GPC Visa users can gain
instant savings with these suppliers when they use their
card. Most suppliers will offer Government bodies a discount
if they can offer a corporate contract, and some suppliers
will also discount for using GPC Visa because they get earlier
payment and increased efficiency in their management of
invoices. Figure 8, part 2 describes the process for using
GPC Visa to generate cost savings.
 Frequently Asked Questions
What does it cost to use GPC Visa?
Organisations choosing to implement GPC Visa are charged
nothing for the core contract offerings; i.e. there are no card
or transaction fees and the basic management information
suite is provided for free.
Why should we change to GPC Visa if the existing
system works?
The existing system may work, but at what cost? Does it
make sense to employ people whose job is to copy data from
a piece of paper into a computer if that data can travel from
one computer to another automatically and those people
could be employed to help deliver essential services? You
can use the benchmarking tool on www.purchasingcard.info
to create a business case to determine how much time and
therefore money GPC Visa can save you.
Nobody else is using GPC Visa, why should we?
There are over 500 implementations of GPC Visa in the
public sector, with almost 70,000 cards and over 240,000
transactions processed every month using GPC Visa. Each
and every one of these implementations is in place to deliver
improved efficiency.
Will e-procurement replace GPC Visa?
No, it will not always be possible to use e-procurement,
what about travel and subsistence expenses for example?
However, even where e-procurement can be used,
GPC Visa and e-procurement can complement each other
extremely well. It is necessary for organisations to take
an intelligent approach to the way they conduct purchases
and to consider a full range of technologies. GPC Visa can
be used in conjunction with e-procurement, for example,
the Scottish Executive uses cards to pay for the majority
of the transactions placed through their e-procurement
marketplace, in the same way that you might use a credit
or debit card when shopping online.
Why use GPC Visa if you cannot restrict the suppliers
you can use with it?
Firstly, all staff using GPC Visa cards can be restricted to
using the cards with only certain types of supplier. However,
the key to an effective GPC Visa implementation is to train
staff to use the cards in the right way and to monitor the
monthly card statements. Spend through GPC Visa creates
26
greater visibility of off-contract spend. Organisations who
are prepared to mandate the use of certain suppliers have
remarkably few problems with off-contract spend.
Won’t GPC Visa allow employees to overspend
against budgets?
You can limit the amount of spend by the value of a single
transaction and by monthly spend. Cards can also be
blocked at point of sale.
Will there be enough suppliers to work with?
Any supplier taking Visa can take payment by GPC Visa,
this means that there are over 825,000 suppliers that you
can use in the UK alone. Of these suppliers over 13,000 can
provide additional data in their statements to improve the
management information you receive.
Will our suppliers know what GPC Visa is?
They don’t need to, GPC Visa is like any other Visa
transaction – any supplier accepting Visa will accept GPC Visa.
Won’t suppliers add on a charge if we pay by GPC Visa?
No, using GPC Visa will mean that suppliers will have to
pay a small percentage charge on each transaction that
they process. However, many suppliers will benefit from
accepting payment by GPC Visa, because they receive
payment early and because they don’t have to process the
transaction using paper. GPC Visa is more efficient for the
buyer and the supplier, which is why key suppliers will often
offer discounts for GPC Visa users. Some suppliers are so
happy to accept payment by card that they sometimes ask
for payment from public sector customers to be made by
GPC Visa, instead of payment by other means.
What if suppliers will only accept the card for
low amounts?
Payments of over £5000 are regularly made on GPC Visa.
How can our processes be more efficient if we cannot
integrate GPC Visa management information into
legacy systems?
All GPC Visa issuing banks can provide software to integrate
with the majority of legacy systems. If you need clarification
on compatibility, contact your issuing bank (contact details
can be found on the last page of this report).
27
How can card payments be more efficient if we cannot
reconcile GPC Visa transaction data?
There are a number of companies providing sophisticated
software to help you reconcile, categorise and allocate
your GPC Visa data. The cost of these solutions can range
from hundreds of pounds to thousands of pounds, but
the business case for this work is relatively easy to make
depending on the volume of orders you can place through
a GPC Visa card.
How can card payments be more efficient if we cannot
account for VAT when purchasing from level
one suppliers?
Suppliers can provide you with either basic data or
enhanced data. Basic data is the type of data that you would
receive in your personal credit card statement. Enhanced
data provides a breakdown of that information to include
the amount of VAT being paid on a transaction. If suppliers
provide basic data the reconciliation process remains the
same; enhanced data, when used in conjunction with
reconciliation software, can automate the VAT
reconciliation process.
Won’t GPC Visa lead to job losses?
No. GPC Visa creates opportunities for the organisation
to use staff engaged on administrative procurement and
financial tasks to spend their time on tasks that add value
to the organisation. It is likely that you will require less
temporary staff following the implementation of GPC Visa.
When using GPC Visa, where will the savings come
from, aren’t they just imaginary?
No, the savings are there but you have to recover them from
within your organisation. The National Audit Office (NAO)
estimates that organisations can save £28 in efficiency per
transaction from using GPC Visa, but these savings can
only be recovered when allied with a clear strategy for
re-organisation and recovery. Not everyone is happy to
accept this figure for savings, so you will need to identify a
level of saving that is appropriate for your organisation and
know how you will recover these savings.
Contacts 28

Barclaycard Business Royal Bank Of Scotland VISA Europe

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