Transcript Document

POWERFUL
PURCHASE CARD PROGRAMS FOR
SCHOOLS
Presented by:
Diamond Mind is the leading expert on payment technology
and solutions to over 800 independent schools.
We are devoted solely to schools, established in 2003.
Our purchase card program was designed specifically for K-12 in
2007 and has been continuously evolving.
250 schools across the U.S. use the Diamond Mind purchase card.
Currently a combined credit line of $200M available to our client
schools and $45M being spent annually.
How are they different from
other types of credit cards?
Part 1
Understanding
Why should a school use a
purchase card?
What types of purchases
can it be used for?
Part 2
Implementing
Tips for successfully
implementing a program
Part 1
UNDERSTANDIN
G
PURCHASE CARDS
An efficient and flexible form
of credit card that is paid off
each month and allows for better
control, limits, and visibility
than other types of credit cards.
PERSONAL
SMALL BUSINESS
PURCHASE CARD
1-2 Cards
1-5 Cards
10+ Cards
Most Yes/Some No
Most Yes/Some No
No
Bank Controlled, Few
Admin Options
Mostly Bank
Controlled, Few Admin
Options
Primarily School
Admin Controlled,
More Admin Options
Guarantee Type
Personal
Combined Personal
and School
School
Fee Per Cards
$0 - 450
$0 - 450
$0 - 75
Unlimited/capped
cash back or rewards
Unlimited /capped
cash back or rewards
Unlimited cash back
Typical Number of Cards
Accrues Interest/
Carries Balance
Card Controls
Rewards
Purchase cards offer
 Better cost controls
 Reduced administrative time
 Encourage cost reductions
Benefits of a purchase card program
PAYMENT CONTROLS
ONLINE MANAGEMENT TOOLS
REDUCED TIME
Customize purchasing parameters (ie.
transactions limits)
View invoices and control spending limits
Code transaction information for transfer
into school accounting system
Can save between 55% and 80% of traditional
processing costs* (roughly $74/transaction!)
Save an average of 8 days from the paper
procurement cycle time of 12 days
REDUCED PAPERWORK
Responsibility for 1099 filings are managed
by processor, not your school
* 2012 Purchasing Card Benchmark Survey Results by RPMG Research
Common Uses of a Purchase Card in
Schools
• Travel (school trips, etc.)
• Computer Equipment
• Utilities and Grounds
• Renovation and Construction
• Teacher/Faculty Supplies
• Legal and Accounting Services
• Furniture
• Fuel
Uncommon Uses of a Purchase Card in
Schools
• Wig and Toupee Shops
• Automobile and Truck Dealers
• Dairy Product Stores
• Duty Free Stores
• Tax Payments
• Debt and Personal Counseling
• Towing Services
• Video Game Arcades
It’s an efficient and flexible form
of credit card that is paid off
each month and allows for
better control , limits,
and visibility
than other types of credit cards.
Part 2
TIPS
FOR SUCCESSFULLY
IMPLEMENTING A PURCHASE
CARD PROGRAM
Elements of a Powerful Purchase Card Program
1
Plan Ahead
7
Maximize
Monetary
Benefits
2
Empower
Employees
3
Control
Regularly
6
Expand Usage
5
Transfer Data
4
Eliminate
Paperwork
1
Plan Ahead
Ensure Your Credit Limit is Sufficient


Estimate your highest spend in a given period


Double that amount (think long-term growth!)
Think of major purchases, travel, group trips,
and upcoming events
Your financials should support what you ask for
1
Plan Ahead
Develop Internal Policies and Procedures
to Manage Program

Define roles and responsibilities for program
management

Prepare internal policies and forms
•
Create cardholder agreement
•
Create card checkout forms when applicable
•
Ask your program provider for best practices
1
Plan Ahead
Communicate with Stakeholders and
Employees

Excite about the benefits

Gain card holder or department head buy-in

Educate on the process

Share the success stories a year later
2
Empower Employees
Issue individual cards to everyone
who needs to make purchases or
incur expenses

Replace the need to use personal credit cards,
checks, and petty cash

Take advantage of automatic currency
conversion on foreign trips

Place ownership on cardholders for spending
and reporting
2
Empower Employees
Use department cards where appropriate

To group expenses by event or category
(fuel, travel, maintenance, etc.)

To enable temps or volunteers (book fair,
auctions, etc.)

Create controls and log of card usage
2
Empower Employees
Train your staff on online expense
tracking and expense management

Utilize your system to make your job easier!
3
Control Regularly
Manage controls for each card



Align credit limits with each employee’s needs

Daily reporting and real-time transaction
information
Vary credit limits over time as needed
Get the most out of available restrictions, (e.g.,
max transaction amount, limited acceptance,
foreign transactions)
3
Control Regularly
Group Cards as Needed


Group cards into departments
Delegate responsibilities to department heads
3
Control Regularly
Get further insight into purchases
through Level III data


Lists every item purchased in an order
Contains all Level II data: purchase
order number, customer number,
description, additional details, etc.
4
Eliminate Paperwork
Simplify expense tracking, reporting,
and approval


Move it online
Use multi-tier approval process if necessary
4
Eliminate Paperwork
Minimize Paper Receipts

Upload Receipts
Skip filing 1099-MISC

Responsibility to issue 1099-MISC is
transferred to the banks and processors of
the business who accepts the card
5
Transfer Into Accounting System
Pre-assign transactions to your account
codes



Auto-assignment or entered one-by-one
By employees or business office
Approver control on accounting code assignments
5
Transfer Into Accounting System
Transfer all transactions into your financial
system

Transactions exportable in various formats
5
Transfer Into Accounting System
Make your auditors happy!



Provide transaction details
Level III data available
Reduce work for business officer
6
Expand Usage


Make it a default payment option

Run a match of your frequently used vendors
against lists provided by card associations
Review the list of most common credit card
acceptors used by independent schools at
www.diamondmindinc.com/acceptors
7
Maximize Monetary Benefits
Get cash back

Maximize cash back with more frequent or faster payments

Watch for promotional categories
Automate invoice payments

Pay electronically

Get the most with auto-debit
Benefit from predictable cash flow

Insight into where you are spending and paying bills
Powerful Purchase Card Program Elements Recap
1
Plan Ahead
7
Maximize
Monetary
Benefits
2
Empower
Employees
3
Control
Regularly
6
Expand Usage
5
Transfer Data
4
Eliminate
Paperwork
Case Study – DM Client School in Wilton,
NH
Overview
Number of Students:
108
Staff Members:
49
Grades:
9 – 12
Annual Revenue:
$4 Million
New finance manager arrived in
2010
Case Study - DM Client School in Wilton,
NH
The Problem
 Business manager surprised by current process
• Several employees frequently used personal credit cards to
make purchases for school
• Wasn’t sure if employees had any spending or transaction
limits
• No official system to enforce the limits that did exist
 Only able to reimburse employees once a month
 Challenging to stick to a campus-wide budget and limit
spending with such a system
 School needed to track and limit spending
• Tried bank card program, loved the security, but still did not have
enough controls or accounting system compatibility
Case Study - DM Client School in Wilton,
NH
The Solution
 She was referred to Diamond Mind by a peer school because she
was particularly interested in a service provider who specialized
exclusively in independent schools
 With the Diamond Mind MasterCard, they could set spending
limits and restrict purchases to specific categories
 She also could send spending notifications and alerts, as well as
manage all of these options online
 Data could also easily be transferred into her QuickBooks
accounting system. We even customized her desired data
export format.
 They would enjoy all these added benefits and count on the security
of the MasterCard brand
Case Study - DM Client School in Wilton,
NH
The Outcome
 School has 20 Diamond Mind Purchase Cards for
employees
 $30K available credit line per month
Today, the business manager has a clear picture
going into each month of who is spending and what
items are being purchased.
Because she is using a Purchase Card program, she can
reconcile quickly and easily each month and has
control
over employee spending.
THANK YOU!
www.diamondmindinc.com