Controlling off-site purchases: the key to business efficiency

Lack of real-time visibility and control

One of the biggest hurdles in offsite purchasing is the absence of real-time insights into spending. Without centralised tracking, it’s difficult to monitor who is making purchases, what they are buying, and where funds are being spent. This lack of transparency complicates budget management and increases the risk of unauthorised or unnecessary expenditures.

As evidenced by the Deloitte’s 2023 Global Chief Procurement Officer Survey, when businesses do not have real-time visibility into their expenditures, they struggle with budget adherence and accurate forecasting.

Heightened risk of fraud and non-compliance

Not only does decentralised purchasing reduce visibility, but it also increases the risk of fraud. When purchases are made without proper oversight, both employee fraud and vendor fraud become more likely. Employees may submit false expense claims or make unapproved purchases, while vendors may inflate prices or charge for goods and services that were never delivered.

Moreover, ensuring compliance in off-site purchasing can be challenging, as different locations may interpret policies differently or fail to adhere to company regulations. A study by the Association of Certified Fraud Examiners (ACFE) reveals that the largest contributing factor to occupational fraud is weak internal controls. Unauthorised purchases outside of approved channels, or as some may call it “maverick spending”, can lead to budget overruns and compliance issues with internal policies and even external regulations.

According to Enterprise Apps Today, businesses across the globe lose about 5% of their revenue to occupational fraud, which includes schemes like petty cash.

Inefficient processes and operational delays

Traditional purchasing processes, such as paper-based approvals and manual data entry, are time-consuming and prone to errors. These methods often result in delays that can disrupt project timelines, impact productivity and slow down business operations overall. For example, if a remote team needs urgent supplies but the purchasing process is tedious, delays can lead to project stagnation and hidden costs.

In fact, Stampli notes that companies can lose between 20% to 30% of their revenue each year to inefficiencies such as delays in task completion.

Complex inventory management

Managing inventory with remote purchasing teams can be particularly complex. Offsite purchases can lead to discrepancies in stock levels, resulting in stockouts or overstocking. Without proper control of inventory purchases, businesses may face wasted resources, increased carrying costs, or operational disruptions due to missing supplies.

How preloadable debit card solutions can help

Preloadable debit card solutions effectively address purchasing challenges by enhancing control, transparency, and efficiency. These cards provide businesses with real-time visibility into employee spending, allowing for set spending limits, transaction tracking, and centralised monitoring. Furthermore, reporting features enable better financial oversight and facilitate data-driven decision-making.

In addition to these benefits, preloadable debit cards help mitigate fraud risks by restricting purchases to preallocated amounts. Moreover, companies can limit card usage to approved vendors and categories, ensuring compliance with internal policies. Additionally, real-time transaction tracking and reporting enhance adherence to regulatory requirements, reducing the likelihood of financial discrepancies.
These cards also simplify the purchasing process by eliminating manual expense reports and reimbursements. As a result, employees can make authorised purchases without delays, while finance teams can efficiently manage and monitor transactions. Card management platforms also enable instant card loading, enhancing workflow efficiency and reducing administrative burdens.

To maintain control over spending, companies can assign specific budgets to individual cards and reload funds as necessary. This approach ensures that expenses stay within budget while granting teams the flexibility to make essential purchases. This is specifically helpful in the purchasing of inventory, as predetermined amounts can be loaded onto cards for these designated purchases, making it easy to track and limit these expenses.

Ultimately, managing offsite purchases effectively requires businesses to address challenges such as lack of visibility, fraud risks, operational inefficiencies, and missed cost-saving opportunities. By adopting modern solutions like preloadable debit cards, companies can streamline purchasing processes, enhance budget control, and reduce administrative overhead. With the right approach, organisations can transform offsite purchasing into a well-coordinated, cost-effective process that supports overall business growth.

Don’t let untrackable expenses sabotage your business. Our blog, The hidden costs of petty cash: why your business might be losing more than you think, reveals how petty cash may be a black hole in your company finances.