Transcript BMO e.Purchasing Solutions: - Financial Management Institute

THE BIG PICTURE
Enhanced Data
Data Elements
Cardholder Information
Transaction Amount/Date
Currency Code Conversion
Sales Tax – Calculated
Sales Taxes – Paid
Customer Code
Merchant Tax ID
Merchant Postal Code
Merchant State/Province Code
Ship to Postal Code
Ship from Postal Code
Freight Amount
Duty Amount
Destination Country Code
Item Product Code (Commodity
Code)
Item Description
Item Quantity
Item Unit of Measure
Discount Amount
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Level 4
Industry
Specific
The Concept – The Culture
Monitoring and Control
• Best Practices
TOP TEN: BEST PRACTICES
• NUMBER 10:
– USE THE INFREQUENT BAD APPLES AS
EXAMPLES
– Make consequences known of improper use
• “DOD publicizes a shortlist of employees who have
been held accountable for illegal or improper use of
the card.*
TOP TEN: BEST PRACTICES
• NUMBER 9:
– ESTABLISHING A MULTI_FACETED
STRATEGIC APPROACH TO
MONITORING AND OVERSIGHT
• GSA mandates that contractors provide
electronic reports to agency mangers, that
are secure and easy to access over the
Internet.*
• “A strong training program, state of the art
tools,. And a detailed review structure gives
federal agencies all the tools necessary to
effectively run their card programs
TOP TEN: BEST PRACTICES
• NUMBER 8:
– TAKE ADVANTAGE OF
PREVENTIVE CONTROL TO
MINIMIZE EXPOSURE
• Merchant Category Code Blocking
mechanisms are available from all
card providers
• GSA publishes a list of MCC codes
Govt might consider restricting: GSA’s
Blueprint for Success: Purchase Card
Oversight Guide
TOP TEN: BEST PRACTICES
• NUMBER 7:
– MAKE TRAINING MANDATORY
• In Testimony to congress, GAO
emphasized that effective
management or an organization’s
workforce, its human capital, is
essential to achieving results and is an
important part of internal control
• USDA issues a tri-fold Purchase Card
“Quick Guide” to cardholders to
consult as a quick reminder on
appropriate use of the card*
TOP TEN: BEST PRACTICES
• NUMBER 6:
– ENSURE SEPARATION OF DUTIES
• Responsibilities of cardholders,
reviewing officials and agency
program coordinators should not
overlap
• DOD states: “Separation of duties
creates a situation that should
preclude errors or attempts at fraud or
embezzlement from going
undetected”*
TOP TEN: BEST PRACTICES
• NUMBER 5:
– IDENTIFY APPROPRIATE
OVERSIGHT OFFICIALS AND
CLEARLY DELINEATE
RESPONSIBILITIES
• DOD P-Card Program = approx.. five to
seven cardholders to each reviewing
official
TOP TEN: BEST PRACTICES
• NUMBER 4:
– ESTABLISH SPENDING LIMITS
COMMENSURATE WITH NEEDS
• Cardholders can receive a one-time
spending limit increase in the event of
a legitimate need to do so.
• Annual review of the program should
include an assessment of the credit
limits, identifying shortfalls or overallocation
TOP TEN: BEST PRACTICES
• NUMBER 3:
– BE SELECTIVE IN ISSUING CARDS
• Establish an effective approval
process
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–
what is the card needed for?
Frequency of use
“ Right cards in the right hands”
credit utilization maximized, tracking
minimized
TOP TEN: BEST PRACTICES
• NUMBER 2:
– COMMIT THE RESOURCES
NEEDED TO ACHIEVE SUCCESS
• Business Finance Magazine“Preventing P-Card Plateaus,:
– “ don’t cripple program by trying to run it
too cheaply”
TOP TEN: BEST PRACTICES
• NUMBER 1:
– ENSURE STRONG MANAGEMENT
SUPPORT OF CONTROLS
– GSA: “It is no coincidence that
agencies that clearly communicate
their intolerance for payment
delinquency, misuse and abuse,
and hold those who fail to perform
accountable, also have the best run
card programs”
Technology
CORPORATE CARDS
Line of Products
• Purchasing Cards
• Travel and Entertainment
• Fleet
Blocking Features
• Corporate Limit
• Single Transaction Dollar Limit
• Daily / Monthly Card Spend Limits &
Number of transactions
• Blocking Capabilities – no limit
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Country Code
Cash Advance
Merchant Category and Specific Supplier
Single Per Transaction Limit by specific Supplier / MCC
Billing
• Day grace
• Centralized / decentralized
• Electronic vs. paper
Ghost Accounts
• Central billed accounts
• No plastic
• Open account with strategic supplier
Departmental Account
• Central billed accounts
• Usually has a plastic
• Travel expenses or specific group
purchases
Diversion Accounts
• Consolidation to a central bill
• Improve cardholder’s cash flow
Pre-Paid Account
• Petty cash
• Project management
Declining Balance Accounts
• With or without replenishment
• Budget, Project Card and petty cash
• Consultants or temporary employees
Account Receivable
• Anyone’s payable is someone’s receivable
– Ghost account
– The bank credit card statement becomes the
Corporation billing process
– Savings attached to automated payments
– Eg. Via Rail Canada
The Strategy
• Structure
• Culture
• Technology
Consultative Program Evaluation
Value Realization (VRP) is a customized
consulting service that includes:
•In-depth analysis of Accounts Payable
•Industry 'Best-Practice' Recommendations
•Policy and Procedure Review
Program objectives:
•Scope Opportunity
•Predict Performance Using Benchmark Averages
•Identify and Explore key spend thresholds, top vendors, top commodities
and eCommerce opportunities
•Track and Celebrate Successes
•Rebates
Guy Bilodeau MBA
V.P. BMO Spend and Payment solutions
[email protected]