From POs to purchasing cards in K-12 school districts

Every school district wants to increase its efficiency so teachers and admin staff can focus on what really matters — their students. 

But great classroom experiences often require purchases to make learning easier and more accessible, whether it be funding field trips, online resources, essential classroom equipment and technologies, or simple materials like arts and crafts supplies. 

And yet, the challenge for many is clear: requesting and waiting on purchase orders or filing expense reports can be a slow process.

So, what options do school districts have when it comes to navigating the inefficiencies of the purchasing process?

The answer is simple: purchasing cards.

Purchasing cards make financial processes easier by reducing or eliminating the need for POs, purchase requisitions, cutting checks, and other time-consuming processes. 

Purchasing cards enhance your school district’s insights through detailed reporting, tracking information, and reconciliation software that easily integrates with the right financial management solution. Keep tabs on what and how much your staff spends on each approved vendor, approve or decline spending requests in just one click, easily view invoices by payment type, and reduce the workload on your accounting team by using purchasing cards for smaller purchases.   

Keep reading to learn why school districts are shifting from POs to purchasing cards, the differences between the two, the advantages of switching to this model, and how they can streamline your K-12 finance processes.

What is a Purchasing Card?

A purchasing card is a business charge card that enables teachers, administrative staff, and school officials to make purchases on behalf of the school division. You may have heard purchasing cards also referred to as: 

• P-cards
• Purchase cards
• Procurement cards
• Corporate charge cards
• Business cards
• Prepaid expense cards

Purchasing cards provide a more cost-effective and efficient way to purchase and pay for small-dollar transactions. These handy cards simplify the procurement process, expedite vendor payments, reduce paperwork, and empower school and department administrators. 

Establishing a purchase card program within your district helps facilitate the purchase of goods and services by eliminating the need for POs and reimbursing personal out-of-pocket expenses (which can take days or even weeks to finalize) while maintaining large petty cash funds. In addition, with the p-card program, you can automatically authorize certain expenditures to keep your choice of suppliers and spending limits under control.

What’s the Difference Between Purchasing Cards and POs?

Purchase orders (POs) were initially designed to help employees spend company money through a straightforward procedure with someone overseeing every transaction. Purchase cards and POs have their similarities:

• Your finance department has complete visibility over your district’s spending
• Easily track budgets
• Limit impulse purchases
• Employees learn what types of purchases are acceptable

However, the main difference between P-cards and POs is the bottleneck that POs create. Specific to purchase orders, anytime your school district staff requires a “quick” purchase, even for minor things like updating a software subscription, there are extra steps involved. Submitting the PO request and waiting on the approval process can significantly delay the purchase and, in turn, your team’s efficiency since your purchasing department must respond to every small request. This is a prime example of spending money where you simply don’t need to. 

Why K-12 Education Should Switch to the P-Card Approach

P-cards enable your district staff to purchase and execute payments in one step. They still require approval before the payment goes through. However, they no longer have to bug your purchasing team for every little purchase. 

With built-in automated approval flows, anytime your K-12 teachers, admin staff, or district leaders request funds, the person in charge of approving the purchase receives a notification that they can either approve or decline with just one click. After the purchasing card payment is approved, it becomes preformatted for your accounting department so they can push the purchases and payments directly to their financial management system. 

Here’s how it works:

• One of your teachers wants to spend $1500.00 on a new laptop. This is over their designated spending amount, so they put in a request through the automated approval system. 
• Your purchasing manager immediately receives a notification for their request and can approve or deny it on the spot. 
• If they approve your teacher’s request, said teacher now has $1500.00 available on their card to spend wherever your district buys its laptops from. Your teacher can’t spend these funds anywhere but at that place. 
• Your teacher makes the payment with the purchasing card and immediately uploads the receipt to the system.
• Your purchasing manager or financial controller can log in anytime to view the purchase and the accompanying receipt and push the data to their K-12 financial management software’s GL account. 

Using the purchasing card model, you maintain your desired visibility and control over spending while empowering your staff to make their own purchases without needing to interrupt someone else’s workflow, wait lengthy times for approval, or waste time matching purchase orders to receipts.

What Benefits Do Purchasing Cards Offer My School District?

Purchasing cards are more than just a quick, convenient way for school district staff to pay for smaller purchases, like classroom supplies, services, and materials, without needing authorization or a PO. Purchasing cards can streamline how your entire financial department works by:

• Providing spending analytics for grades K-12: Gain better control over your district spending by setting spending limits and creating lists of approved suppliers and vendors. With convenient online dashboards, you have full transparency on all transactions.
• Simplifying the purchasing process: Your cardholders can eliminate the lengthy PO process on smaller purchases, thereby reducing purchasing times. P-cards empower your school and department administrators to purchase what they need, anytime they need it.
• Cutting back on time and money spent on your admin staff: Visa and Citi released a report showing a 77% savings in admin costs when businesses switched from paper POs to purchasing cards.
• Controlling your expense management: P-cards offer longer payment terms than regular credit cards, helping cash-flow-reliant districts keep their money longer.
• Eliminating the need for district staff reimbursements: Your finance team saves both time and money by not having to process lengthy expense reports while your district staff keeps their money in their own pocket.
  
• Improving expense and vendor tracking: Establishing P-card accounts for each vendor and supplier helps you keep a closer eye on your expenses.
• Automating your accounting: Some purchasing card providers allow you to set up supplier codes that match your general ledger. Any time your cardholder makes a purchase, they use the appropriate supplier name and code by choosing from a pre-populated list or creating a new one. Then all your accountant needs to do is hit export, and they automatically upload the data to their financial management software.
• Providing individually-named cards: Every staff member that makes purchases can have a card — even teachers and admin staff. Individually-named cards make purchasing processes more secure and easier to control. Knowing exactly who made the purchase makes tracking down the receipts and aligning the purchase card payments against budgets simpler.
• Setting specific rules for individual users: How you set your rules is entirely up to you; there are no limits! For example, enable your school leaders to spend with no fixed limit, reduce or increase the amounts for different departments, or allow a monthly average as low as $50.00 before users require approval.
• Reducing fraud and unauthorized spending: Set credit limits tailored to your expected use of every card. For example, anytime an invoice gets approved, you can increase the vendor’s P-card credit limit from $0 to the amount of your authorized payment to avoid any unauthorized charges.
• Issuing single-use online virtual cards: Many of your district staff may prefer shopping online to traditional brick-and-mortar stores. If you’re cautious about sharing your district’s purchasing card details over the web, check out the P-card companies that allow you to create unique virtual cards for each online purchase. Not only do these cards eliminate the need to find a physical card for every online purchase, but these single-use cards never use the same card information twice. If a website gets hacked and the information is stolen, you can easily cancel that card while all your other purchasing cards continue as usual.

How do P-Cards Streamline K-12’s Finance and Purchasing Processes?

After reading about the practical advantages of implementing the purchasing card system, you may wonder how this model benefits your finance and purchasing departments. 

Sharing company credit cards can be a hassle. Every purchase your district staff makes requires your finance team to go back and forth with the purchaser. But if your teachers, administrative staff, and district leaders have their own purchasing cards, you eliminate some of the burden from your finance team. 

By removing the need for POs on smaller purchases, you save your accounting team time that they can put towards other tasks. You’ll likely keep your procurement process for larger purchases, however, using POs for things like educational posters, cloud storage, software subscriptions, study tools, or other physical or online resources is a waste of time and effort for your finance team. In addition, having coded payments at the point of sale makes reconciling payments and balancing the books a faster, more efficient process when using P-cards.

Embrace the Shift to Purchasing Cards With Edsembli

If you’re looking to take advantage of using purchasing cards over purchase orders, Edsembli’s all-in-one financial management platform has everything you need to improve your operational efficiency:

• Simplify your routine processes
• Reduce administrative burden by putting an end to manual processes like procurement
• Save time and cut costs without the need for multiple third-party integrations

With the Edsembli ecosystem, all your data is interconnected, making issuing, tracking, and paying purchase cards easier than ever. The overall result is greater visibility over spending, fewer security risks, and a more efficient accounts payable department.

Book a demo of our most powerful platform yet—the Edsembli Ecosystem—built by education for education.