MiDeal-Bank-of-America - MCCBOA

Transcript MiDeal-Bank-of-America - MCCBOA

Michigan Community College Association Conference

Bank of America’s Treasury Management Solutions: An Introduction to Purchase Card and ePayables November 7

, 2013

Agenda

• • • • Introductions MiDeal Overview Purchasing Card Overview Works Technology • Payment Automation ePayables • Next Steps • Questions 2

Introductions

Client Management William Mungai Vice President, Client Manager Public Sector Banking Phone: 617.434.9679

Email: [email protected]

Joseph (Joe) Kiss Senior Vice President, Senior Client Manager Public Sector Banking Phone: 989.964.7821

Email: [email protected]

Client Team Christopher Brin Vice President, Treasury Solutions Officer Public Sector Banking Phone: 757.884.3938

Email: [email protected]

Kenneth (Ken) Harroun Vice President, Treasury Solutions Officer Public Sector Banking Phone: 248.631.0550

Email: [email protected]

Extended Team Nancy Cournaya Vice President, Senior Card Account Manager Card Account Management - Central Phone: 312-992-6295 Email: [email protected]

Client

Mi Deal Overview: State of Michigan Procurement Card Services

State of Michigan Procurement Card Services (Mi Deal)

Bank of America is the provider for the State of Michigan Electronic Payment Card Services – Statewide Procurement Card Contract since 2008. Under the Contract, Bank of America provides purchasing card and ePayables services to municipalities and government bodies within the State as long as they are a member State of Michigan Mi Deal program and meet the program volume requirements. • Purchasing Card participant volume requirement of $1,000,000 annually A current listing of approved program members is available at: http://www.michigan.gov/mideal . Benefits of Mi Deal / State of Michigan • • • • • • • • The need to go through the RFP process is eliminated Easy enrollment No program or cardholder fees Networking and Best Practices Assigned Card Account Manager Assigned Card Account Specialist for servicing needs Works application to manage your card program Rebate rate tier determined by adding state and local government bodies 5

Purchasing

Card Overview: Replacing Check Payments

Purchasing Card: Replacing Check Payments with a Card Solution

• Many of our government clients have embraced the electronic payment process because it provides a unique opportunity to reduce expenses and increase efficiencies. More importantly, it minimizes the risk of fraud and increases transparencies for auditors and constituents alike without changing the accounts payable processes currently in place. • Purchasing cards are the quickest and easiest way to eliminate low dollar/low value transactions • Purchasing Cards fit perfectly into most organization’s AP process and can drive out paper in a short amount of time • The average organization has the potential to more than double the number of transactions under $2,500 that are paid by p-card and increase fourfold the number of transactions from $2,500-$10,000.

• Penetration in P-card spending payments has increased for office equipment, travel, computers, maintenance/repair/operations, telecommunications, printing & duplicating, media/advertising and transportation/delivery services.

• P Card spend increased nationwide 17.6% from 2007-2009 7

Purchasing Card: Controls and Fraud Protection

Controls: • Manage cards in real time – at the push of a button within Works, increase/decrease funds on card or disable cards in real time • Dispute transactions • Ability to offer zero-dollar cards and declining balance cards for optimized control • Enforce corporate and individual spending policies • Block merchants using Merchant Category Codes (MCC) • Impose single transaction limits, daily/weekly/monthly spending limits Fraud Prevention: Bank of America has instituted a number of procedures to decrease exposure to fraud including: • Card PIN Activation • Card Expiration Date • Card Verification Value • Physical Card Features Bank of America was recently recognized by Javelin (an independent research and study entity) for the 8 th straight year as ‘Best in Class’ for Fraud Detection/Prevention, Servicing, and Claims Resolutions in 2013 for our card programs.

• The survey was done across the top 25 card issuers • Bank of America scored a 79 which was 8 points ahead of our closest competitor CitiBank • The average score across all participants was 55 8

Works Technology: Card Management and Online Reporting at your fingertips

Purchasing Card Online Reporting Tool: Works

®  The most innovative web-based electronic payment solutions systems in the industry  − − Data can easily be integrated into accounts payable systems with 40+ standard reports including receipt imaging & management Custom reporting by spend by vendor, department, project, grant, GL code, hierarchy, etc.

Automated 1099 reporting  − Automated Reconciliation General Ledger (GL) allocation and export for GL upload  − − − − Tools to mitigate fraud: Real-time card controls including card issuance and suspension Optional pre-purchase approval process Declining balance card issuance Merchant Category Code (MCC) restrictions and transaction limits to purchasing authority   Works® accommodates unique cardholder, manager, auditor, accountant and administrator permissions Two years of online data retention 10

Works

® Card maintenance and Active Card Controls Real-time manipulation of credit availability Pre-approval and post approval workflows Easy integration into your ERP system Online hierarchy management Spend monitoring for encumbered funds and discretionary/ incremental funds

Payment Automation: Replacing Checks with the Bank of America Vendor Card solution, ePayables

ePayables: How does the Service Work

Bank of America Merrill Lynch was the first to market with the solution and is the largest issuer of ePayables programs, processing more than $12 billion and 2.1 million transactions in 2012.

ePayables is a complementary solution to the Purchasing card designed to further increase payment transformation from check to a card solution. In order to qualify we can perform a vendor analysis for you and provide a sample proforma of expected enrollment. The minimum requirement to participate is to have an expected vendor enrollment figure of $2 million based off of the vendor analysis.

• Replace 30-40% of non-payroll AP check volume • Turns a costly check into a “free” electronic payment • Eliminates per-item banking fees and processing costs • Optimizes your efficiency and working capital • Extends float opportunity and provides cash payout incentives • Requires no changes to the upfront accounts payable process • Enhances transaction risk management Invoice received and approved to pay Client ERP/AP System Works processes AP file Works funds card Push pay – payment pushed to vendor’s merchant account Card processor ePay– vendor charges card 12

Electronic vs. paper payment processes at a glance

Payment method Record of payment Payment action Remittance advice Vendor cash received Client paid cash Confirmation of payment Check Check run file Print on check per supplier ID Check stub with invoice line-item detail Check deposited; funds clear in 5-7 days Cash withdrawn upon check clearing Positive pay file ePayables Payments Card run file Dynamically fund one card number per supplier ID Email notification with invoice line item detail Card transaction authorized; cash transferred in 2-3 business days Bank statement paid in 30-45 days after transaction posts Works ® exports file with posted card transaction details 13

The Value of ePayables

BUYER BENEFITS ▪ Reduce costs and efficiencies Make AP payments with no transaction fees ▪ ▪ Incentive cash payouts based on spend Increases float for improved cash flow ▪ ▪ ▪ Improve transaction risk management Helps control card payments by only authorizing pre-approved payment amounts Reduced risk of fraud through elimination of checks and cards issued with $0 credit limits Improve buying power by offering your vendors a faster, more reliable payment option ▪ ▪ ▪ Further payment automation strategy Replaces costly paper payment with low cost electronic payments Provides vendor enrollment support More than 75,000 vendors enrolled to accept ePayables on approved invoices SUPPLIER BENEFITS ▪ ▪ ▪ Control and costs Receive electronic payments without need to give bank information to customers Reduced payment receipt processing cost by eliminating paper payments Uses existing card technologies, processes and protections ▪ Relationship Strengthens relationship with buyer while reducing the costs and risks associated with paper payments Efficiency and float ▪ Remittance data transmitted electronically with payment for easy application to account ▪ Funds made available on card at time of remittance (remittance can be via email or fax) ▪ Improve Days Sales Outstanding (DSO)

Starting a Purchasing Card or ePayables program with Bank of America

Next Steps

• Please contact your client manager or treasury solutions officer to setup a follow up discussion.

• Review the State of Michigan contract to see how it can help your organization earn a rebate for utilizing a Purchasing Card / ePayables program.

• Create a customized financial benefit analysis for your organization to see the value of converting to an electronic card solution.

• We are pleased to offer a one on one demonstration of our proprietary online reporting tool and card management application, Works™ for your organization.

Your Bank of America client team are here to help. We can help you understand what is available in the market and what fits best for your organization.

Questions

Notice to Recipient

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