0. Best Practices
October 2011
Strictly Private and Confidential

1. Best Practices Agenda Define Best Practices
Federal Agencies
Define Best Practices
Understand the Value of Best Practices
Policies and Procedures vs. Best Practices
How to implement and Standardize Best Practices
Improved Program Management and Performance

2. Best Practices Best Practices Defined Wikipedia says:
Federal Agencies
Wikipedia says:
Best practices are generally accepted, informally standardized techniques, methods or processes that have proven themselves over time to accomplish given tasks
Often based upon common sense, these practices are commonly used where no specific formal methodology is in place or the existing methodology does not sufficiently address the issue. The idea is that with proper processes, checks and testing, a desired outcome can be delivered more effectively with fewer problems and unforeseen complications
In addition, a “best” practice can evolve to become better as improvements are discovered
Best practice is considered by some as a business buzzword, used to describe the process of developing and following a standard way of doing things that multiple organizations can use

3. Understanding the Value of Best Practices

4. Best Practices Understand the Value of Best Practices
Federal Agencies
Goals and Best Practices
Efficiency in program and process management
The best way to make payments
Cost and time savings
Operate within compliance requirements
Government mandated
Agency policy
Ease of program administration
Impacts you and your field program administrators
Simplify payment process and requirements for cardholders

5. Best Practices Balancing Risk and Efficiency Managing Risk
Federal Agencies
Managing Risk
Maintain internal controls to meet objectives
Effectiveness and efficiency of operations
Reliable financial reporting
Compliance with applicable laws and regulations
Minimize waste, fraud and misuse

6. Best Practices Five Standards for Internal Control Objectives
Federal Agencies
Control Environment
Organizational structure and culture
Risk Assessment
Identify internal and external risk jeopardizing objectives
Control Activities
Policies, procedures and mechanisms to achieve objectives
Information and Communications
Information shared vertically and horizontally
Monitoring
Continuous and periodic reviews of data and performance

7. Best Practices Best Practices apply to internal and external processes
Federal Agencies
Lay groundwork for sound program structure
Develop reporting for minimum standards for program effectiveness
Established policies and procedures can drive how you transact and interact with vendors
Remain open to alternate processes
Understand the organization culture
Senior management role and impact on overall administration

8. Policies and Procedures

9. Best Practices Policies and Procedures vs. Best Practices
Federal Agencies
Clearly Identify Organization Goals and Objectives
Goals will drive practices to create efficiency and can include:
Increased card usage
Static or decreased AP head count
Vendor discounts
Centralized payables reporting
Shift focus to larger dollar transactions
Improve cash flow
Provide definition of Policy vs. Procedure
Policy is strategic as in goals
Procedure is tactical as in how to step by step achieve the goal

10. Best Practices Policies and Procedures vs. Best Practices
Federal Agencies
Different meanings for different organizations
Card use controls can impact results
Categories of spend
Transaction limits
Number of cardholders
High-value purchases
Alternative payments mechanisms to capture spend
Analyze current check payments – AP file match – Optimization
Span of control – Approvers

11. Best Practices Individual Bill Travel Best Practices
Federal Agencies
Card Controls are still a major factor:
Deactivate when not traveling
Split disbursements
Delinquency management
Consistent administrative/disciplinary actions
Authority to take action
Tell stories about people using cards when they aren’t on travel, maybe claim mistakenly took wrong card from account.
Or figured they would just pay it like it was a consumer card.
Talk about the reports available in CCRS to see delinquency, can subscribe so it is there same day each month.

12. Best Practices Central Bill Travel Best Practices
Federal Agencies
Centralize travel management and reconciliation are challenging:
Policy for use
Tracking expense reporting
Travel Management Company (TMC) participation and enhanced data
Speed of pay
Discuss reporting available in CCRS to assist with program management. Can use dashboards and canned queries already built in the tool.

13. Best Practices
There are common practices that apply to both payment and travel
Balance of internal controls
Internal communication – Training
Detection tools for misuse and abuse
Split transactions
Restaurants in home city
Weekends or Holidays
Audits and data mining
PA time constraints
Primary metric – spend or transaction volume
Senior management support
Periodic review of internal controls

14. Implementing and Reviewing Best Practices

15. Best Practices How to Implement and Standardize Best Practices
Federal Agencies
Create a Vision for the Program Model
Ingredients for Implementation:
Entity Mission and Policy & Procedures
Derived from agency parameters
Includes external requirements
Internal controls and documentation
Requirements to manage risk
Establish practices for compliance
Narrative for plan
Understanding credit card processing
Full comprehension of transaction processing
Poll the audience if they attended the morning session that went through the life cycle of a transaction. If not, then review it briefly.

16. Best Practices How to Implement and Standardize Best Practices
Federal Agencies
Create a Vision for the Program Model (cont.)
More Ingredients for Implementation:
Cardholder management
Card profiles
Cardholder training
Administrative/disciplinary actions
Non-Cardholder roles and responsibilities
Span of control
Cardholder processing
Risk management
Delinquency, misuse, abuse
Clarify that delinquency is an IB travel concern, but the misuse and abuse are applicable to payment and travel

17. Best Practices How to Implement and Standardize Best Practices
Federal Agencies
Vision for Program Model
Final Ingredients for Implementation:
Reporting requirements
Operational Tracking
Management reporting
Review and adjust
Periodic updates
Evolving program
Legislative environment

18. Best Practices Do’s and Don’ts for Best Practice Implementation
Federal Agencies
Consider the need for change to policies and procedures
Track your program performance using the reporting tools available
Review program processes with field PA
Solicit cardholder feedback
Understand your organizational culture and how to operate within
Gather senior management feedback and support
Network at this conference and any other conferences
Don’t operate in a vacuum
Don’t assume the current way is the best
Refer to CCRS for tracking program performance, Dashboards are perfect for that. But there are also queries that help review your program performance.
Reviewing program with field PA is two way discussion to find their best practices that can be shared entity wide.

19. Improved Program Performance

20. Recommendations for Program Growth
Best Practices
Recommendations for Program Growth
To increase program growth, it is important to continuously monitor program performance and explore new opportunities for card use.
Convert paper check payments to P-card payments – optimization analysis
Establish appropriate policies
Overcome resistance to change – switching behavior
Target spend categories
Establish meaningful goals
Travel Advance cards
Eliminate Petty Cash
Discuss the fact that this is all meant to drive efficiency from top to bottom of the program.

21. Best Practices Key Action Steps
Increase awareness and education of the program through webinars and marketing initiatives
Use Citi training tools for continuing system training for all program administrators
Make P-Card easy decision to use for employees - dollar threshold for micro purchases – many states use $5,000, but depends on entity policies
Supplier enablement – work with Citi to assist vendors in meeting your purchasing needs

22. Best-in-class Purchase Card Programs Include
Best Practices
Best-in-class Purchase Card Programs Include
Strong executive endorsement
Cross-functional collaboration (Acquisition, Finance, Logistics, Internal Controls, etc.)
Correct distribution of cards
Correct utilization of cards (payment and purchase)
Connection to comprehensive cost management agenda (strategic sourcing)
Mandated card use
The establishment of appropriate policies
Enforcement of established policies
Correct refers to making certain the right people have the cards and they know how to properly use them.

23. Purchasing Card Benchmark Statistics
Best Practices
Purchasing Card Benchmark Statistics
Average administrative cost savings using Purchase Card is $70
Paper process averages $90
Purchase card process averages $20
Purchase cards reduce procurement cycle time by approximately 12 days
Reduce the number of suppliers managed in Accounts Payable (AP) databases by an average of 16
Result in a reduction or redeployment of staff in AP and Procurement functions
Twenty-six percent of all organizations report the use of purchasing card data to obtain a higher discount for goods or services
Ghost Accounts have increased usage for procurement
Increased spending limits and categories promote higher program spend to include larger average transaction amounts
* Statistics provided by the 2010 Purchasing Card Benchmark Survey Results by Richard Palmer and Mahendra Gupta, RPMG Research Corporation

24. Travel Card Benchmark Information
Best Practices
Travel Card Benchmark Information
Mandating the use of the Travel card results in positive outcomes for the organization
Higher capture of travel spend on card
Spend capture enabled discount negotiations
Received senior management program support
Drove technology development for expense management systems
Trend to provide a single type card with similar spend features
Goals include process efficiency and cost reduction and data integration into financial systems
Broader card distribution resulted in higher penetration of travel budget payments with the card
* Information provided by the 2009 Corporate Travel Card Benchmark Survey Results by Richard Palmer and Mahendra Gupta, RPMG Research Corporation

25. Next Steps with Citibank
Best Practices
Next Steps with Citibank
Discuss your goals with your Account Manager
Review current processes and policies
Work with Account Manager to establish a plan
Consider check payment vendor match-Optimization

26. Federal Agencies 26

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