Procurement departments are challenged in a myriad of ways. One of the most obvious is the sheer volume of incoming data that they are responsible for. Take university procurement for example (though this certainly applies to procurement departments at large corporations and government administrations as well). A typical mid-sized university may have around 430 cards and over $800k in monthly P-Card spend, according to data aggregated by RPMG Research.
A typical procurement department at a university this size is a team of under ten people. And keep in mind those numbers cited are just for mid-sized universities. Large, public universities may dwarf those numbers without having a proportionate increase in procurement team size. Is it realistic to expect these procurement teams to do 100% review of spend data at that volume? It’s doable, perhaps, but that is a lot of busywork, especially if there isn’t a person whose role is specifically to review all of those transactions. When considering internal versus external review of spend data, outsourcing can make a lot of sense to take some of the pressure off of your procurement team.
Risk is Rampant
100% spend review is necessary because of risks like fraud and duplicate payments. According to the American Productivity and Quality Center, duplicate payments make up an average of 1.5% of an organization’s annual spend. Additionally, 40% of organizations have between 1-5% duplicate invoices, according to the Institute of Finance & Management. And according to PwC, $50 billion each year is lost from organizations because of employee theft. Organizations both public and private have a median loss of $150,000 per year. We’re sure you get the point: spend data is prone to risk, and there’s plenty of it to go around. If you’re interested in further reading, Procurement Tactics has compiled a hub of procurement fraud statistics, which was recently updated at the time of this article’s writing in 2024. When your procurement team says that they are doing 100% review, is that really accurate? Is anything slipping through the cracks?
How Card Integrity Reduces Workload
Card Integrity’s DataWISE service reduces workload by analyzing and monitoring your organization’s expenses without letting anything through the cracks. DataWISE generates monthly reports on organizational spend, showing category insights and trends, as well as cardholder behavior for each of the unique cardholders across your organizations. Questionable transactions are “red flagged” and brought to the forefront for review. Transactions can be red flagged for a variety of reasons, including suspected duplicate payment, split transactions, suspected fraud, maverick or rogue spend, and more. Specific red flags are created and tailored to your organizational policy, and are completely customizable. An assigned forensic principle for your account from Card Integrity communicates directly with your procurement program with the results. Instead of going through every single transaction one-by-one, you have much less to look at. Card Integrity brings these actionable insights to your attention immediately with DataWISE.
While Card Integrity’s external review process is backed by AI and machine learning, it’s supplemented by a real person (the forensic principle). And at the end of the day, it’s your procurement department that makes the final call on whether flagged transactions pass or fail. DataWISE does not replace anyone on your team, it is a simply a tool to supplement their work. Essentially, Card Integrity’s DataWISE service provides a job function at a fraction of the cost of hiring someone new in.
Your team may be doing 100% review, but unless you’re introducing an element of automation to the process, it’s likely that you’re running up against the limit of what is realistically possible. That’s what Card Integrity is for—to keep a watchful eye on your spend data.
See It in Action with a Free Trial
Card Integrity offers a free “pilot”, or trial run, of the DataWISE service. The trial period is one month, and gives your procurement team insights into what the reports entail. We like to say that it provides a “snapshot” into your card program’s spend. There is no software implementation or IT integration whatsoever, and no obligation to purchase. Click here to learn more!
“Many Hands Make Light Work”: Combating Staffing Issues
Staffing issues continue to be a challenge in many industries, procurement, AP, and sourcing included. This results in reduced efficiency in procurement card programs and weakened internal controls. If you find that your team is overworked and falling behind and you’re having trouble getting more people, external review may be a cost-effective solution for your department.
“Card Integrity’s services, compared to hiring somebody who has that level of knowledge … are incredibly valuable to our program.”
Card Services Manager, Iowa State University Procurement Services
