Seneca Medical Inc. only started using purchasing cards in 2007, but already the company is employing a couple of different strategies to make the cards work more effectively for the $350 million distributor of medical and surgical supplies. First, Seneca has eight plastic cards in circulation to use traditionally to buy small stuff directly. But it also has a ghost card it uses with two suppliers of core inventory, and that 'card' sees $700,000 of action monthly, with an impressive average transaction size of $30,000.

While invoices are still received and matched, payment to suppliers is not delayed. "When we get invoices from the suppliers using the ghost card, we match them with our monthly credit card bill," reports CFO Todd Howell. "The vendor is paid on shipment, and we don't have to pay our bank [KeyBank] for 30 days and are not charged interest. These suppliers offer prompt-payment discounts, so by paying quickly with the card, we get a 2% discount. That means that a $50,000 order only costs us $49,000. It's a tremendous savings." Seneca only uses the cards with these two vendors for purchases in Indiana and Ohio, but hopes to pump up volume by using the card in two more states soon.

But while Seneca tried to convince other large suppliers to participate, it did not want to let them recoup card interchange (another term for discount rate charged by bankers for using cards) by raising prices. "We wouldn't use the card with these suppliers," Howell explains. "There are smaller vendors who will happily discount for immediate access to their money, but many of the big ones like Johnson & Johnson don't like it."So does that mean a card program doesn't really fit Tiffin, Ohio-based Seneca? Not at all. The company doesn't sweat the fact that cards don't work across the board. It simply segments suppliers and uses cards where they do work.