Transcript PRO-Cards - Oasbo.com

PRO-Cards:
The next generation of procurement
strategies using 21st Century
technology
Angie Peterman – Oregon ASBO
Executive Director
The Traditional PO Process Can Be
Painful…
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Paper Intensive / Mountains of Paper
Multiple Departments Involved
Same Process Regardless of Transaction Value
High Average per transaction cost to School
District
High average per transactions cost to the vendor
Not Cost-Effective for Small Purchases
Challenges of the Purchasing
Process
How the Corporate Purchasing Card
Works
Why is the Streamlining of Small
Purchases Significant?
1.
The majority of transactions in most
organizations are for relatively small
amounts:
 District 203 – 58% of AP checks are for less
than $500
 District 204 – 58% of AP checks are for less
than $500
 Institute Of Management & Administration
article – 60% of case study purchases less
than $1, 000
What are the Experts Saying?
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“The average cost of processing a
purchase order manually is between $75$200. Automating procurement reduces
that cost to between $10-$40…. The
Return-On-Investment (ROI) for
eProcurement is amazing.”
-Deloitte Consulting
Real Example of Reducing Paper
Work
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Fulton County Schools, Georgia
– 70,000 Students
– Two cards per building
– Reduced PO’s from 60,000 to 30,000
Key to Success:
Get PRO-cards into the hands of those
who are currently making small
purchases/generating PO’s of less than
$1,000.
What are Procurement Cards?
They look and operate similar to credit
cards
 They do not carry a revolving line of
credit
 Usage and authorization parameters can
be reviewed and managed via the internet
by district administration
 They control what can be purchased,
where and limit amount per transaction
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Superior Control and Flexibility
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Cardmember Spending limits can be
established for each card
– Transaction limits per charge
– Monthly limits
– Preferred Supplier Restriction
– Cardmembers can only charge at school
district’s preferred suppliers
Advantages of an Association
sponsored program
One contract vs. many
 Reduced legal expense
 Ability of association to ensure
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– Adequate controls
– Proper audit trail
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Customized Card Design
– Displaying
1.User’s name
2.School District name
Advantages of an Association
sponsored program (Cont.)
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Implementation and inservicing
 Rebates
 Creates a user group/support network
 Gives the program contract negotiation
clout
 Creates a database on a statewide basis of
what schools are purchasing and the
quantity
Number of Cards
3000
2500
2000
# of Cards 03-04
1500
# of Cards 04-05
# of Cards 05-06
1000
500
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Volume
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$ Volume 03-04
$800,000
$ Volume 04-05
$ Volume 05-06
$600,000
$400,000
$200,000
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Billing Cycle Requirements
School District may choose a billing cycle cut-off
of the 5th or the 20th
 Payment is due at Harris Bank within 21 days of
billing cycle cut-off
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– Penalty for late payment (Prime + 7%) on all
transactions in the billing cycle
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Penalties can be avoided with pre-planning and
monitoring on-line usage reports
Billing and Payment
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Monthly Billing Statements
– Consolidated Billing Statement (Available
online)
– Cardmember Report (available online)
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Payment Methods
– Electronic Funds Transfer
– Automated Clearing House
– Check
Why was MasterCard selected?
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Global acceptance at over 35 million
locations
– “Few if any other cards are more widely
accepted.”
Retailers benefit from low transaction
charge.
 One of the lowest rates in the industry
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Why was MasterCard selected?
(cont.)
Superior vision around technology and ecommerce
 MasterCoverage fraud protection insurance
 Dedicated Merchant Group (Moneris) to
sign up suppliers
 Customized card design displaying the
name of card holder, school district, tax
exempt number
 Individualized Training
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Online Capabilities (7-24)
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Online Program Management
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Submit, approve, and cancel Card accounts
Instant Account Activation
Adjust spending limits/manage Cardmember profiles
View Cardmember charges
Change accounting information
Online Information Services
– View/Manage Program Information
– Access to Web reporting tools
Vendor Benefits
Reduces vendor transaction costs
 Vendor paid by Harris within 48 hours of
shipment/pick-up
 Reduces the issues of partially filled orders
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Benefits of a Purchasing Card
Program for Management
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Easier on Accounts Payable
– Submit one monthly payment vs. multiple payments
to multiple vendors
– Reduction in paperwork
– Fraud prevention and protection through the Bank
and Mastercard
– Detailed reporting available 24 x 7
– Easy online administration and dedicated customer
support
– Control on spending limits and accepted vendors
Steps Necessary to Participate in
the Procurement Card Program
1.
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Request information packet from Oregon ASBO
Submit resolution to local school board for
purchasing card participation/last 3 year’s
audits/other packet information
Identify local Purchasing Card administrators
Complete application packet – send to Oregon
ASBO
Schedule and complete training
Steps Necessary to Participate in
the Procurement Card Program
(Cont.)
Identify Cardholders
Designate individual parameters
Establish internal control process for statement
reconciliation
9. Have individual users sign usage agreement
10. Distribute cards
11. Monitor the program
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Angie Peterman
Director of Admin. Support Services
Oregon School Boards Association
P.O. Box 1068
Salem, OR 97308-1068
503.588.2800 (Tel)
503.588.2813 (Fax)
[email protected]
PACKETS