THE BIG PICTURE

Enhanced Data

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: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 over- allocation

TOP TEN: BEST PRACTICES NUMBER 3: –BE SELECTIVE IN ISSUING CARDS Establish an effective approval process –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 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