fueling up the p-card and early pay discounts
TRANSCRIPT
Fueling up the P-card and Early Pay Discounts
American Red CrossPresented By: Michael Harris
Senior Director – Finance Business Support
The can’t miss P2P networking event for professionals in:• Accounts Payable
• Finance
• Procurement
• Shared Services
• Supply Chain
• IT & Treasury
innovate.paystreamadvisors.com
Speakers Include:• William Cooper, CPO, University of
California
• June Gregg, Director of Transaction Services, ServiceMaster
• Kim Rankel, Director of Purchase-to-Pay, Eli Lilly and Company
• Ben Shaffer, Director of Payment Services, PG&E
American Red Cross
• Mission StatementThe American Red Cross prevents and alleviates human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors.
• Vision StatementThe American Red Cross, through its strong network of volunteers, donors and partners, is always there in times of need. We aspire to turn compassion into action so that...
all people affected by disaster across the country and around the world receive care, shelter and hope;
our communities are ready and prepared for disasters; everyone in our country has access to safe, lifesaving blood and blood products; all members of our armed services and their families find support and comfort whenever needed; in an emergency, there are always trained individuals nearby, ready to use their Red Cross skills
to save lives.
Shared Services Value
Consolidate - Pick up and move- Gain Control of Processes- Minimal process change- Organization identity- Reduced platform
Standardize - Process Change- Quick Hits- Service Agreements- Continuous Improvement- Improve Customer Service
Integrate - Process focus- Technology deployed- Initial E-Commerce- Workflow- ERP backbone- Web – enabled- Balanced Scorecards- High skilled employees- Benchmarking
Virtual - Customer focus- Stand alone operation- Relationship Mgmt.- Information Mgmt.- Clear business impact- Competitive opportunity- Integrated systems (internal and external)- Performance metrics- Self service capability
Value
Organizational change management
Shared Services Value
SpeedStabilityAccuracy
Reduced CostImprove Quality
Customer Satisfaction
Quality Service
Cost
ARC Historical Look Back
High cost to process over 600,000 annual paper invoices.
Over 18,000 active annual external suppliers paid via check.
Late payments and lost discounts to suppliers.
High risk / Low controls.
Transform with P-Cards
P-Card perception. Redefine the “P”. Procurement versus
Payment. Change of philosophy.• Who should have a P-card?• What is the P-Card invoice value limit?• What about ERP purchase orders?
P-Card Monthly Cycle – Field Cards
Typical Monthly P-Card Cycle
Fie
ld O
ffice
Ban
k S
yste
mF
inan
ceS
uppl
ier Supplier sends
invoice to Field Office
Approve for payment
Pay Supplier with P-Card
Supplier receives payment
Supplier processes payment
Bank settles and records payment
Cardholder reconciles payments
Cardholders Supervisor Approves
Reconciliation
Liaison confirms reconciliation
Charges posted to General Ledger
Payment made to bank
Bank receives payment
P-Card Monthly Cycle – AP Internal Cards
Typical Monthly P-Card Cycle – Internal AP
Acc
oun
ts
Pa
yab
leB
ank
Sys
tem
Fin
ance
Su
pplie
r Supplier sends invoice to Field
Office
Approve for payment
Pay Supplier with P-Card
Supplier receives payment
Supplier processes payment
Bank settles and records payment
Cardholder reconciles payments
Cardholders Supervisor Approves
Reconciliation
Liaison confirms reconciliation
Charges posted to General Ledger
Payment made to bank
Bank receives payment
Key invoice into ERP
P-Card Paygroup
Benefits
Reduction in paper invoices to AP. Increase on-time settlement with
suppliers. Electronic reconciliation with workflow
approval and general ledger coding. Reduction in ERP vendor master. Reduction in overall AP cost to process. Maximize P-Card spend
Challenges
Increases ERP General Ledger reconciliations due to differences in keyed transactions versus P-Card settlement.
• Supplier processing fees.• Supplier gives a discount.• Supplier time lag in processing
transaction.
P-Card Spend History
P-Card Spend
0
50
100
150
200
250
FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
Fiscal Year
$ m
illi
on
s
P-Card $million
Where we are today
Over 10 years P-Card experience. 6800+ number of P-Cards issued to staff. 500,000 annual P-Card transactions. Use of ghost cards for central travel
booking. Online reconciliation system. Multi-million dollar annual rebates. Reduced ERP suppliers down to 6,500.
Transform Discounts
Identify opportunities. 80/20 spend analysis. Put a process in place. JUST ASK! Focus, Measure & Improve.
Early Payment Discounts
Early Payment Discounts
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
Fiscal Year
Do
llar
s
Taken
Lost
Early Payment Discounts
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Perc
enta
ge
Take
n
FY01 FY03 FY05 FY07 FY09 FY11
Fiscal Year
Percentage Taken
Percentage Taken
New Challenges
Bringing in payables for over 600 Chapters.
Circa 500,000 annual paper invoices. Rolling out standard processes and
improved controls to non-standard operating units.
Looking Forward
Electronic P2P System implemented. Scanning & Workflow Technology. Virtual Cards. Convert from P-Card to ACH with early
payment discount.
The can’t miss P2P networking event for professionals in:• Accounts Payable
• Finance
• Procurement
• Shared Services
• Supply Chain
• IT & Treasury
innovate.paystreamadvisors.com
Speakers Include:• William Cooper, CPO, University of
California
• June Gregg, Director of Transaction Services, ServiceMaster
• Kim Rankel, Director of Purchase-to-Pay, Eli Lilly and Company
• Ben Shaffer, Director of Payment Services, PG&E