commercial card optimization recommendations

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© Fifth Third Bank | All Rights Reserved | Member FDIC Classification: Confidential

© Fifth Third Bank | All Rights Reserved | Member FDIC

Commercial Card

Optimization

Recommendations prepared for Owen County School

District

November 2018

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Agenda

Card, ePay and Supplier Enablement Process

Supplier Analysis Results

Value Proposition

Next Steps

Appendix

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Payables Optimization

Establish working capital and automation goals

Drive strategy for supplier relationships

Card Program

Utilize range of solutions

Increase card accepting vendors through supplier enablement

Increase card rebate income

Extend DPO

Check Disbursement

Minimize exposure to fraud

Simplify reconciliation

Alternative for vendors that are unwilling to accept rebate programs of card or ACH networks

Identify opportunities to reduce check volume

Continue to campaign to move check payments to electronic options

Provide core check fulfillment for remaining checks

Traditional ACH/Wire

Streamline the payment process

Increase acceptance of electronic payment methods

Create sustainable source of income

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Commercial Card Cardholder Portal

Cardholder Portal provides access to:

• Credit limit

• Current balance

• Pending transaction balance

• Available balance

• Posted transaction details

• Declined transaction details

• Statements

• Search for specific transactions

• Change your PIN

• Subscribe to alerts and notifications

Corporate card holders can easily manage their accounts by providing

quick and easy access to the card information:

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Solutions provide management and oversight, reporting and reconciliation to

support successful operation and command of your program

SDg2

Comprehensive standard reports (>60) to leverage with strategic decisions

Empower employees with the exact reports they need (configurable)

Provides real time transaction activity and management-reporting

Seamlessly integrate transaction data to Concur or any ERP systems

CCM

Commercial Card

Management

Easily create new cards and close current cards with bespoke roles and duties

Effectively manage card profiles (monthly spend limit, velocity restrictions, MCC

restrictions) in real time to keep spending needs and control in balance

Comprehensive Online Tools Provide Key Benefits

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Supplier

ePay Process Overview

A card run simply replaces a check run

Payment File

Reconciliation

Cost Containment Saves by eliminating paper processes

Supplier Friendly Supplier-friendly receivables options maximize supplier

enablement & improve supplier DSO

Nominal Investment & Change Maintain integrity of your existing A/P processes & controls

Revenue Enhancement Revenue share (rebate), Cost Containment, DPO

Process Improvement Migration from paper to electronic

Encrypted E-mail

Posted Transactions

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Supplier Benefits

Card acceptance provides significant benefits for suppliers

Cash Flow Receive payments more quickly and improve your cash flow

Customer Acquisition and

Retention Acquire new customers and strengthens relationship with existing customers

Customer Service

Improvement Improves level of service, providing additional data customers can use for cost

allocation, reconciliation, compliance with sales and use tax reporting

Sales Volume Impact Increased sales volume

Competitive Position Card acceptance opens this new sales channel for your company

Credit & Collection Cost

Reduction Minimize need for costly credit approvals and collection activities

Improved Efficiency Less paperwork to process due to simplified order process

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A Framework for Success

Supplier

Enablement

Strategy Supplier Outreach

Conduct supplier outreach

Managed supplier list

Provide supplier education

Support inbound inquiries

Campaign Readiness

Customize communication

materials

Creation

Establish key milestones

Review Fifth Third’s

recommendations

Consultation

Review Supplier Information

Discuss Owen County’s goals

Provide conversion effective

results

Identify key opportunities

for next campaign

Results & Analysis

A Defined Methodology for Supplier Enablement

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Strategic Account Manager

Your Strategic Account Manager, Joe Daughtrey will:

Work in collaboration with the Owen County School District team to optimize their

program

Create a clearly defined strategy for vendor enrollment

Share industry benchmarking and best practices

Orchestrated vendor enrollment campaigns for 7 KY School Districts

Strategic Account Reporting

Spend: Cardholder data, Industry-benchmarks, Trending

Dollar Volume: Enrollment Data, Progress reports

Expansion: Segmentation, Spend Categories,

Division/Department, etc

Industry Knowledge: Service Data, Trends, etc.

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Fifth Third Bank

Treasury Management Services Fifth Third Bank

Opportunity Estimate

Overall File Statistics

Suppliers Spend Full File 988 $11,448,929

Conservative Opportunity Estimate

Match Category Suppliers Spend

Construction

Spend Portion

Estimated

Capture

Estimated

Opportunity

Estimated

Opportunity without

Construction VCN Acceptors 168 $1,121,782 $574,977 45% $504,802 $246,062

High Matched Suppliers 155 $1,280,347 $447,189 20% $256,069 $166,631

Medium Matched Suppliers 92 $1,174,679 $328,583 15% $176,202 $126,914

Low Matched Suppliers 28 $340,695 $30,046 10% $34,070 $31,065

Unmatched Suppliers 81 $864,302 $13,093 5% $43,215 $42,560

Removed/Rejected Suppliers 182 $6,657,936 $0 0% $0 $0

Total $1,014,358 $613,232

Treasury Management Services

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Top VCN Accepting Suppliers by Spend

Supplier Name Annual

Amount

Match Code

NORWOOD HARDWARE AND SUPPLY COMPANY* $181,481 HIGH

ELITAIRE INC* $104,850 HIGH

KIEFER SPECIALTY FLOORING INC* $70,000 HIGH

SCHOOL SPECIALTY $67,893 MEDIUM

DAIKIN APPLIED AMERICAS INC* $65,250 HIGH

MASTERS SUPPLY INC* $57,408 HIGH

D C ELEVATOR $43,541 HIGH

BLUEGRASS INTERNATIONAL TRUCKS $37,506 HIGH

C T DESIGN EQUIPMENT COMPANY $31,774 HIGH

PAUL MILLER FORD INC $26,878 HIGH

R J ROBERTS INC* $23,965 MEDIUM

AMERICAN BUS ACCESSORIES $23,454 HIGH

CUMMINS CROSSPOINT LLC* $23,315 HIGH

INTEGRATION PARTNERS $21,337 HIGH

FLORENCE WINLECTRIC CO $18,152 MEDIUM

EDGENUITY INC $18,000 HIGH

LITANIA SPORTS GROUP INC* $16,886 HIGH

MILLENNIUM BUSINESS SYSTEMS $14,552 HIGH

BEST ONE $13,542 HIGH

PRESENTATION SOLUTIONS $10,754 HIGH

CLARKE POWER SERVICES INC $10,087 HIGH

PROJECT LEAD THE WAY INC $9,827 HIGH

EFCO CORPORATION* $9,316 HIGH

NCS PEARSON $9,285 MEDIUM

R L CRAIG COMPANY INC* $8,595 HIGH

*Construction related vendors

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Value Proposition

Rebate Estimate w/ Construction

Store Cards: $35,907

Annual ePay spend estimate: $1,014,358

Estimated annualized spend: $1,050,265 + T&E

Assumed rebate rate: 1.40%*

Estimated Annualized rebate: $14,703

Benefits of expanding card program via ePay

• Reduce check costs

• More efficient method of paying vendors

• Further fraud protection

• Annual rebate provided to Owen County Schools

• Increase working capital by extending payables days

*Based on Estimated Annualized 2018 Kentucky Education Co-op Spend

Rebate Estimate w/o Construction

Store Cards: $35,907

Annual ePay spend estimate: $613,232

Estimated annualized spend: $649,139+ T&E

Assumed rebate rate: 1.40%*

Estimated Annualized rebate: $9,088

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Questions?

Next Steps

Complete Supplier Analysis with current card spend

Provide Income Benefit Analysis

To do:

Card Documentation (Owen County School District)

Establish Credit Limit (Fifth Third)

Implementation (Fifth Third & Owen County School District)

Questions / Next Steps

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Appendix

• Rebate Schedule

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Rebate Schedule

commercial card optimization recommendations

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