paper to electronic - card gfoa conference august 2012│ tucson, az
TRANSCRIPT
Paper to Electronic - CardGFOA Conference
August 2012│ Tucson, AZ
2
Bank of America
16 Years with Bank of America
10 Years within Treasury / Card
State , County, City, Higher Education, School Districts, and Commercial Clients
Experience
David A. Randolph, Vice President
Card Account Manager Southwest Government
602.523.6996
3
City of Chandler
20+ years in the Public Sector14 years in Banking Industry
Experience
Sharon Brause, CPPB, CPCP
Procurement Officer
480-782-2407
4
Bank of America – National Card Portfolio Overview
Over 52 years of experience in the Card industry, beginning with Bankamericard (Visa)
Provide Card solutions to about 12,000 companies with an annual corporate card volume of about $24 billion
Created the first dedicated vendor enrollment team to enroll your trading partners into ePayables
$300MM 18-month Global Treasury investment, (e.g. Push Payments, Receipts Imaging, Global Card, Works)
ePayablesCard ShufflerPush Pay
Purchasing CardTravel CardPre-paid (incentive)
Paymode - XPaymode – X +Paymode – X eInvoicing
CheckWire ACH
Achieved 15% in Card portfolio growth in 2009
Achieved 31% in Card portfolio growth in 2010*
Achieved 13% in Card portfolio growth in 2011
*Above standard industry growth rates
Card Products Volume – 2011
Purchasing Card $11,414,890,905
ePayables $10,030,186,000
Travel Card $2,964,841,373
Corporate One Card $3,515,768,362
Total $27,925,686,640
5
Bank of America – Arizona Card Portfolio
Provide Card solutions to approximately 28 organizations in AZ
2010 annual Card volume of about $53 million
2011 Jan – Oct Card volume of about $68 million
Estimated 2012 total volume $78 million
AZ Public Sector Group - City of Chandler
Purchase Card Program – September 2000
ePayables Program – March 2009
Card Products Volume – 2011
Purchasing Card $57,650,624
ePayables $10,847,621
Total $68,498,245
Card ProductsVolume – Jan ‘12 – Jun ‘12
Purchasing Card $53,473,735
ePayables $6,342,083
Total $59,815,818
Payments EvolutionHow does Card compare?
7
Payments Evolution
What is a “Purchase” Card?
9
What is a “Purchase” Card?
Payment Tool – Not simply a credit card
Based on standard, Visa/MasterCard credit card
Provides enhanced Internal controls & reporting
Includes technology to streamline your purchasing process
Purchasing Cards are given to employees to acquire goods and services for their organization
Used to pay Accounts Payable invoices through ghost card application
Central bill/central pay/corporate liability
Most public and private organizations have Purchasing Card programs
10
Transaction Flow
Associations(Visa/MasterCard)
Total Systems (TSYS)
Works / ReportingMerchant
Authorization
Why Purchase Card?
12
Question: Why Purchase Card? Answer: Smart Spending
Reduce costs associated with traditional fee-based payment types
– Typically, 80% of transactions only represent 20% of total dollars spent
– Streamline purchasing and payment procedures through less paperwork and processing time
– Reduce the administrative burden
13
Question: Why Purchase Card? Answer: Smart Spending
Traditional PO P-card
Cost/ transaction
$67.38
$89.21
Purchasing cards deliver savings of 76% over traditional purchase orders (POs).
Savings
Traditional PO P-card
Cycle time
Purchasing cards eliminate 6.3 days from the procure-to-pay process.
6.3 days
Savings
$21.83
9.26
2.96
14
Question: Why Purchase Card? Answer: Smart Spending
Provides cash payout incentive when rebate terms met
– Rebate payout based upon current annualized program spend
– Calculation: Annual program spend x .0117 (117 BPS)
Program Volume: 2,000,000 x 117 BPS = $23,400 rebate
Extends float and allows for more accurate cash balance tracking
1099 Relief
– The combination of Regulations issued in August 2010 along with a Notice released in December 2010 means that card transactions are no longer subject to IRS reporting and withholding rules
– Check transactions in 2011 and 2012 remain subject to the same rules as before
– The planned expansion of reporting for check transactions has been repealed
– IRS Resources: http://www.federalregister.gov/articles/2010/08/16/2010-20200/information-reporting-for-payments-made-in-settlement-of-payment-card-and-third-party-network
15
Question: Why Purchase Card? Answer: Smart Spending
Authorization Controls
– Merchant Category Code Blocking
– Dollars per transaction, month, billing cycle or day
– Number of transactions per day, month or billing cycle
– Pre-purchase Approvals
Accountability
– Ensure cardholders account for all spending
– Ensure managers are aware and accountable for their employee spending
– Audit Reporting
Visa/MasterCard Liability Protection….
16
Visa Liability Waiver Program
Visa’s misuse protection program is automatically provided with all Bank of America purchasing card programs and comes free of charge to AZ entities.
– In the event that abuse occurs, members will be protected.
– This coverage will be subject to the terms and exclusions of the misuse protection program
The Visa Liability Waiver Program protects members against eligible losses that may be incurred through card misuse by a terminated employee
– This coverage is included on all Bank of America Visa Corporate Card programs and based on the terms of the program will provide up to $100,000 reimbursement of eligible losses per cardholder.
The Visa Liability Waiver Program applies to all transaction types
– Internet
– Mail Order
– Telephone Order
– Face to Face
– Ghost Accounts
– Department Cards
Card EvolutionWhy Automated AP Card?
18
Question: Why Automated AP Card? Answer: Smart Spending
Benefits to you:
– Elimination of expenses associated with check i.e. printing, mailing, bank fees, fraud, etc
– Extends float and allows for more accurate cash balance tracking
– Provides cash payout incentive when rebate terms met
Program Volume: 10,000,000 x 117 BPS = $117,000 rebate
– Incorporates into current AP process
– Provider support for vendor enrollment
Benefits to your vendors:
– Converts the payment to electronic settlement thereby eliminating processing fees (internal and/or bank analysis charges) associated with accepting a check
– Removes the mail float and funds availability factors from the collection process
– Electronic delivery of the remittance information
– Avoid giving out sensitive account number information
19
Question: Why Automated AP Card? Answer: Smart Spending
19
How to Get Started…..
21
How Do I Get Started?
Consultation
– Talk to a financial institution to understand:
Commitment for Card
Experience in AZ
Tools offered to manage a Card program
Additional services (Declining Balance Cards, Automated AP Card solutions, Receipt Imaging Services)
– AP Analysis Pick a project…….
Agreements & Credit
– Consortiums / Public Sector Groups
Internal Support
– Finance, AP, Purchasing, IT
Implementation
– Implementation Engineer
In depth understanding payment processes, GL chart of accounts, Organization structure, Reports, GL Export file
Training
