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14th April 2020

COVID-19: PPN 03/20 – Use of Procurement Cards

Cabinet Office has issued guidance on the use of procurement cards as a means of accelerating payments to suppliers to support and improve cashflow. The guidance has been developed in recognition of the increased pressure that the COVID-19 outbreak has placed on finance teams and the increased importance on maintaining cashflow to suppliers.

Procurement Policy Note (PPN) 03/20 is applicable to central government departments, their executive agencies and non-departmental public bodies (referred to as in scope organisations). The PPN is advisory only for councils.

The guidance advises in scope organisations to do the following:
  • Increase the single transaction limit to £20,000 for key card-holders
  • Raise the monthly limit on spending with procurement cards to £100,000 for key card holders.
  • Ensure an appropriate number of staff have the authority to use these cards.
  • Open all relevant categories of spend to enable these cards to be used more widely.

The PPN highlights a number of benefits that can be achieved by using procurement cards:
  • Access to management information to ensure financial control policies are being adhered to.
  • Help ensure payment is made to suppliers as swiftly as possible.
  • Using a procurement card for one-off approved transactions can save time and money by removing the need for a purchase order to be produced, and for a new supplier to be set up on finance systems.
  • Adds resilience across the organisation during the current crisis (for example, the organisations inability to raise new purchase orders due to staff shortage to pay existing suppliers).
  • The NAO has estimated that using cards typically saves around 35% in transaction costs or £5 per transaction compared with traditional methods.
If you are a public sector organisation interested in using NEPO505 Prepaid Card Accounts please visit the solution webpage and get in touch using the enquiry form.