1. Purchasing Cards

2. What is a Purchasing Card? It is a type of commercial credit card, used by organizations for payment of goods and services. This tool streamlines accounts payable processes, typically replacing paper checks as the payment method for low dollar purchases. Similar to an individuals personal credit card, an employee will purchase goods with the credit card in their name. Unlike ones personal credit card the program is based on the organizations credit, not the individuals. The organization assumes the liability for payment. Each month the cardholder will reconcile the expenses either in the P-Card providers program or their companies ERP (Enterprise Resource Planning System, i.e. Oracle, PeopleSoft) system.

3. Why have a Purchasing Card Program? For your organization to be more profitable! How?????  Improved cash flow  Increased ability to negotiate vendor discounts due to spend data availability  Ease financial burden on employees and/or reduction or elimination of petty cash  Increased ability of supplier consolidation  Reallocation and/or Reduction of staff  More cost effective than processing checks. This varies by organization, but P-Cards are typically 50% less to process than checks

4. Steps in Getting Started  Senior Management support is critical from the beginning  Establish a P-Card team that is represented from key stakeholder departments; AP, Procurement, Accounting, IT, etc.  Research P-Card programs using internet, P-Card studies, NAPCP, or other trade organizations.

5. What to research  Financial benefits of a P-Card Program  Define role of program administrator  How do organizations in your industry use the P-Card  Successes and challenges of program for your organizations culture  Controls available in P-Card programs to assist in fraud prevention  Policy changes to assist in accounting, AP, procurement and fraud controls  Start up costs of program  Timeframe for RFP process and implementation of P-Card program  Attend the NAPCP or other trade conferences to see providers and their available technology options

6. Present research to Senior Management  Prepare a business case  Staffing needed  Cost of program  Proposed funding of program  Potential revenue sharing  Supplier consolidation  Current staff reallocation/reduction  Prepare a project plan  Develop RFP  Develop Implementation Strategy

7. RFP Process A Request for Proposal is a formal and systematic process to communicate your organizations requirements and to gather information about the service provided by a company. Goals and objectives are to be determined by the P-Card Team. The goals and objectives are used as a guideline to write the RFP. The RFP should be written in a logical manner, to ensure complete and accurate responses.

8. Logical Order of an RFP  RFP Introduction and Instructions. Ensure your instructions are specific and the time frame to submit responses is clear.  Overview-Table of Contents  Card Program Information  Card Program Requirements  Issuer Background/Profile  Technical Capabilities/Imaging services available  Security Systems in Place  Program Implementation Plan and Time Frames to Implement Program  Continuing Program Management and Support  Program Costs and Revenue Sharing  Check References

9. Narrowing the providers down  During research, part of the P-Card team went to the NAPCP conference or a trade conference to see providers programs offered.  Choose between 8-15 providers to send your RFP to.  Create a score card to fairly evaluate each RFP submission received.  Each member on the P-Card team will submit their score card for each provider to the Project Manager.  The Project Manger will tally up the score cards and send the results out to the P-Card team.  The top 5 providers will be informed they have made it to the final round and dates will be set up for demonstrations of their service. All other providers are sent a letter informing thanking them for their time, but they are not in the final round.

10. Provider Demonstration Guidelines  Block 3-4 hours out for each provider with the P-Card Team.  Have the provider demonstrate their program.  Each member of the P-Card team has sent the PM a list of their questions for the providers. As the team members ask their questions, the PM will write down the answers.  The PM will follow up with questions that were not addressed during the presentation.  Most important is to have the P-Card Administrator to go into the program and reconcile expenses as an employee with several different scenarios and as a P-Card Administrator running reports and updating cardholder profiles.

11. Choosing the provider  The PM will send out score sheets after all demonstrations were completed by the organizations in the final round.  The PM will tally the score sheets and send out the final results to the P-Card team.  The PM will meet with Senior Management to discuss the final results and get their blessing/buy in on the issuer chosen by the team.  The PM will send out letters to those who were not chosen.  Legal will begin working with the chosen provider on a contract.

12. Implementation  Roles and responsibilities of the end-user and the issuer are defined in the contract.  The PM has created a timeline for completion of tasks and assignment of duties for each P- Card team member including:  Technology-IT teams working together on mapping, chart of accounts, electronic file feeds, etc.  Account set up for cardholders (application processing and activation).  Infrastructure  Policies and procedures  Controls in the environment  Government strategies, 1099 reporting, sales and tax use laws  Training program  Communications sent out to suppliers and to employees.

13. Pilot Group  It is crucial to have a pilot group after implementation is complete.  The pilot group should be a small diverse group of employees who will make several purchases and understand it will require their time to critique the program.  The pilot should run 2-4 months to ensure the following items are properly working.  Reconciliation of expenses  Mapping of expenses into your organizations ERP system  Training materials are updated and ready to go  Communication with employees has been sent out on program and when they will need to apply and train for the P-Card  Auditing processes  Monthly payment to issuer  All P-Card Administrators are trained and prepared for the roll out.  Evaluate and survey the employees on the pilot to make final adjustments to the program prior to roll out.

14. Maintain your Program  Continue to make adjustments to training  Analyze your declines quarterly to make adjustments  Program Administrator attend annual NAPCP conference for continuing education  Audit cardholders  1099 filing process analyzed and updated  Policies and procedures are clear  Program goals have been achieved  Expand your program to key suppliers