cfc u.s. bank one cardeoplugin.commpartners.com/nreca/110712/nreca_110712... · 2011-07-12 ·...
TRANSCRIPT
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Background• Original card programs began in 2001
• Consolidated products into One Card program in August 2006
• Program currently has 168 participants and generated $19.5 million in aggregated spending last year
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U.S. Bank – A Strategic Resource• $311 billion in assets
• 5th-largest commercial bank in the United States
• Unparalleled industry experience
• Solutions for the entire payment continuum
• Program design/implementation expertise
• Unsurpassed resource commitments
• World-class, U.S.-based customer service
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• A strong commitment to the payments business
• Ubiquitous merchant acceptance
• Competitive commercial card advantages for CFC members
• Long-term relationship with a strong and stable commercial bank
U.S. Bank Strategic Benefits
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Purchasing Landscape• Annual purchasing card spending in
North America grew from $161 billion in 2009 to $176 billion in 2010
• Purchasing card spending in North America is expected to increase to $213 billion by 2012 and $255 billion by 2014
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Purchasing Landscape
Purchasing Card Spend in North AmericaSource: 2010 Purchasing Card Benchmark Survey, RPMG Palmer & Gupta
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Cards Are Expanding Into Larger, Core Purchases
CARDS
• Rebate potential
• Extended DPO via credit function
• Control in the form of restricting spend categories and amounts
• Ability to automate G/L interface
• Pre-purchase process efficiencies
• Detailed transaction data
• No cost to buying organization
� T&E
� Office Supplies/MRO
� POS ad hoc purchases
� Petty cash alternative
� Increasingly used for larger purchases including COGS
Common Uses
CARDSCHECKS
Cap Ex
MROAd Hoc
COGS
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Checks
ACH
Wire
Cards
25%
10%7%
13%
2%4%
81%
58%
B2B Payment Matrix(% of total number of transactions)
Source: AFP Electronic Payments Survey Data for 2004 - 2010
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Bottom -Line Results• Average net savings of $69+ per transaction
• Average procurement cycle time reduction of 6.3 days
• Average reduction in supplier base of 31%
• 38% increase in ability to negotiate preferred pricing
• Happier and more productive employees
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Real-World Successes*Procure-to-pay and commercial card programs build the bottom line.
– One electric utility expanded its card program from emergency purchases only to all its routine purchasing, reducing manual AP check payments by more than 65%.
– A leading provider of technology and business solutions plans to move more than $8 million of company spend from paper checks to its commercial card program.
– A construction company saved more than $100,000 and grew its commercial card program from $1 million to $6 million by eliminating local “house” charge accounts.
*2008 Visa Global Procure-to-Pay and Commercial Best Practices Study, Deloitte Consulting
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What Is the CFC One Card?Meets the needs of every co-op’s spending activity—combining the benefits of corporate and purchasing cards in a single card program.
+ =
Purchasing Card
Designed to pay for small dollar, frequently purchased items
� Office equipment and supplies� Maintenance, repair and
operations� Budgetary spend� Computer hardware, software
and peripherals� Printing and duplicating services� Professional, temporary and
janitorial services
Designed to pay for travel and entertainment (T&E) expenses
Corporate Travel Card
� Airfare� Hotel� Car rental� Meals� Entertainment� Meeting and event planning� Employee relocation
Designed to manage both T&E and procurement expenses
One Card
� Office equipment and supplies� T&E� Maintenance, repair and
operations� Budgetary spend� Meeting and event planning� Miscellaneous services� Employee relocation
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Program Benefits• No annual fees or interest
• No credit check on cardholders
• No individual liability
• Flexible online reporting and administration capabilities
• Exciting rebate opportunity
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Program Benefits• Simplify and streamline operations
• Save time, money and resources
• Stay in control and in compliance
• Tailor the card program to your specific needs
• Provide a convenient payment tool to employees
• Make better-informed business decisions
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Types of One Card Accounts• Individual Cardholder Accounts
– A card assigned to an individual employee that has the employee’s name on the card
• Department Cardholder Accounts– A card that is commonly used by a department
or for a specific type of purchase
• Ghost Accounts– A virtual, card-free purchasing account tied to a
single department, supplier or spend category
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One Card for Purchasing• Reduces volume of purchase orders, invoices
and check payments
• Improves purchasing management and provides reporting for IRS and state regulators
• Enables monitoring of corporate policy compliance
• Improves employee spending controls
• Facilitates vendor negotiations
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One Card for T&E• Customized authorization controls
• Online account access
• Cash advance option
• Ability to interface with your accounting software
• Comprehensive travel benefits– Worldwide automatic travel accident insurance:
$250,000
– Excess lost/damaged luggage coverage: $1,250
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Typical Co -op Cardholders• Human resources
• Plant and maintenance employees
• Technical and office staff
• General administration
• Purchasing department
• Advertising/marketing staff
• Sales force
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Typical Co -op Expenditures• Oil and fuel
• Computer and software purchases
• Utilities payments
• Office supplies
• Continuing education expenses
• Online purchases
• Airfare and hotel expenses
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VolumeWholesale Trade
Hotels
Business Expense
Vehicle Expense
Other
Eating/Drinking
Office Services
Airline
Office Supplies
MRO Supplies
Mail/Telphone
Auto/RV Dealers
Annual Volume Type of Spend ATS # of Transactions$5,043,787.93 WHOLESALE TRADE $164.23 30,712$3,610,702.51 HOTELS $295.52 12,218$2,578,426.81 BUSINESS EXPENSE $393.11 6,559$2,418,725.45 VEHICLE EXPENSE $59.73 40,495$1,763,016.10 OTHER $198.47 8,883$1,734,222.01 EATING/DRINKING $50.48 34,354$1,466,929.51 OFFICE SERVICES $364.36 4,026$1,302,718.90 AIRLINE $227.87 5,717$972,141.91 OFFICE SUPPLIES $166.86 5,826$499,338.89 MRO SUPPLIES $365.28 1,367$435,439.17 MAIL/TELEPHONE $312.59 1,393$225,941.45 AUTO/RV DEALERS $273.21 827
One CardTop Co -opSpendCategories
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Rebate Overview• Participating cooperatives have the
opportunity to qualify for an annual cash rebate
• The rebate period runs annually from September through August
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How the Rebate Works• Participating cooperatives must collectively
generate at least $5 million in annual charge volume and have an average transaction size of at least $120.
• The higher the collective charge volume, the higher the percentage of rebate.
• Once the collective program rebate is attained, cooperatives can earn a portion of that rebate if they meet the individual eligibility requirement.
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Individual Rebate Eligibility• The cooperative’s annual spend must be at
least $175,000.
• If the cooperative has an average transaction size of least $120, the rebate is even higher.
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Effective September 1, 2011Two separate ways of earning a cash rebate through the One Card program:
– A portion of the collective rebate will be paid to each cooperative that spends a minimum amount of $5,000 in one rebate year.
– A separate rebate will be paid to each cooperative that averages at least $120 per transaction during the rebate year.
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Rebate Success• 2008–2009 Rebate Year
– Total spend: $15.9 million
– Average transaction size: $125
– Performance Rebate: $67,687
– Individual co-op payouts ranged from $780 to $11,800
• 2009–2010 Rebate Year– Total spend: $19.5 million
– Average transaction size: $144
– Performance Rebate: $71,963
– Individual co-op payouts ranged from $640 to $8,170
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Access OnlineFree Web-based access tool provides:
– Convenient, secure online access to data—anytime, anywhere
– Account setup and maintenance– Ability to adjust cardholder spending limits
– Access to view cardholder statements online– Reports to better understand spending patterns,
vendor usage and policy compliance– Automated posting capabilities to integrate card
data with accounting and general ledger entries
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AutoPay• Amount due is automatically drawn from
specified account
• Cycling date is the 16th of every month unless on a weekend or holiday
• Cooperative chooses a draft date that is within 14 days of the 16th
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Fleet Capabilities• Cards issued at a driver or vehicle level
• Enhanced spending controls– Ability to limit spending to fuel and/or
maintenance only– Prompts for driver ID and odometer reading
– Velocity controls and hard limits
• Accepted by Visa and MasterCard merchants worldwide
• Enhanced fleet data capture ─provided by most major oil companies
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Merchant Category Codes • Provide a method of understanding and
managing company spending by category code
• Use merchant category codes (MCCs) to prevent employee misuse
• Open and close MCC blocks for flexibility as necessary to your organization and supplier base
• Automate annual IRS Form 1099-MISC reporting
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Flexible Spending Management• Authorization parameters
– Monthly spending limit– Daily spending limit
– Single-purchase limit (SPL)
• Supplier category restrictions– Travel, casinos, jewelry, liquor, etc.
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Automated Accounting Methods• Default account code assigned to each card
– Cost center, budget code, company code, etc.
• General Ledger object codes assigned by type of purchase
– Office supplies, computer equipment, hotels, hardware stores, etc.
• Accounting codes can be changed/edited as needed
• Transaction data can be exported for integration with accounting software
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Cooperative Concern 1Spend Out of Policy
– (also known as “Maverick Spend”)– A commercial card is used in a way that does
not conform to the spending policies of the organization
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• Purchase card policy violations account for 0.006% of purchasing card spending—the equivalent of $60 of policy violations for every $1 million of purchasing card spending. 1
• Cumulatively, noncompliant transactions account for about 0.021% of travel card spending (or $210 out of every $1 million of travel card spending), a figure that has fallen from 0.035% in 2006 and 0.163% in 2004. 2
Do Commercial Cards Increase Out-of-Policy Spending?
1 RPMG Research Group, 2010 Purchasing Card Benchmark Survey Report 2 RPMG Research Group, 2009 Corporate Travel Card Benchmark Survey Report
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Cooperative Concern 2Card Misuse
– An employee charges a personal expense through a commercial card and misrepresents it as a business expense.
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Will Employees Misuse Commercial Cards?• Purchasing card misuse accounts for .014% of
purchasing card spending, which is the equivalent of $1.40 of misuse for every $10,000 of purchasing card spend.
– .008% for fraud and misrepresentation– .006% for policy violations
• Losses are a fraction of the administrative cost savings and other benefits attributable to card use .
• Visa Liability Waiver Program covers your cooperative up to $100,000 per cardholder in the event of employee card misuse.
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U.S. Bank SupportGreg Wenisch, Relationship Manager
Jennifer Kartes, Program Coordinator– Custom implementation
– Ongoing strategic consultation– Training on Web-based access tools
– Problem resolution
– A complete partnership approach to your business success
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CFC Program Support• Manages relationship with U.S. Bank• Provides day-to-day member contact• Establishes new cooperative accounts• Answers general member questions and
concerns
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Get Started Today!Contact Tara Cromp for more details:
– Phone: 800-424-2954– E-mail: [email protected]