When MediaNews Group, a Denver-based publisher of 54 newspapers with more than $1 billion in revenue, moved purchasing and accounts payable to a new shared service center in Colorado Springs three years ago, the company saw a way to gain efficiencies by upgrading its purchasing card program from a niche offering used primarily for corporate travel and entertainment to a preferred way of making all but large capital purchases.
"We moved 8,000 transactions a month to our p-card program and reduced staff by about six [full-time employees] through natural attrition," explains Linda Bradford, MediaNews' vice president for shared services. That represents a third of the company's payments and 15% of its operating spend, Bradford notes.
Before the company turned to p-cards, making purchases involved a laborious process of generating purchase orders and routing them for approval, placing orders, receiving goods and invoices, matching invoices to POs and goods received, routing the POs for approval and then printing and mailing checks. Now end users simply buy what they need directly from vendors, pay with their p-cards, reconcile their statements at the end of the month and route the statements and supporting documentation to supervisors for approval, Bradford explains.
"The charges are uploaded automatically to the GL," she says. "It takes a lot of back office work out of the process and eliminates the cost of issuing checks and paying postage."
MediaNews has issued 1,800 American Express cards to its employees. "All expense coding is done in the American Express system," Bradford explains. "Every transaction has a GL code attached. At the end of the month, we interface that system with our JD Edwards accounting system, and the transactions hit the appropriate expense accounts automatically. That is 8,000 transactions a month that no longer tie up AP processors."
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