State of Washington Improving the Value and Performance of your Pcard Program October 1, 2013
Feb 25, 2016
State of WashingtonImproving the Value and Performance of your Pcard Program
October 1, 2013
Increase Card Program Value
Find more value in your card program with U.S. Bank Program Optimization.
• Simple performance evaluation process• Identifies program expansion opportunities• Provides recommendations with ROI payback• Includes implementation action plan• Serves as foundation for Working Capital DNA
(complete payables strategy review)
Tangible Benefits
Benefit Description
Greater Financial Gain
Improve working capital Reduce transaction costs Increase rebate opportunity Lower supplier costs
Improved Supplier
Management
Negotiate deeper price discounts Act on payment term discounts Consolidate suppliers
Increased Spend Visibility
Gain greater visibility to payment detail and enterprise spend Enable more informed decision making Leverage robust reporting
Enhanced Control
Improve oversight and management Block unwanted spend Prevent and detect fraud more easily
Card Program Trends and Best Practices Best practice organizations capture significantly more
spend on cards than the average:• 93% of travel . . . average is 72%• 71% of transactions < $2,500 . . . average is 52%• 53% of transactions $2,500 - $10,000 . . . average is 31%
76% of organizations expect to increase purchasing card spend…expected overall increase is 32%
Checks represent 70.4% of overall organizational payments
RPMG 2011 Travel Card Industry Benchmark Survey / RPMG 2012 Purchasing Card Benchmark Survey
Commitment/ Action
Optimization Process
Benchmark/ Capturing
OpportunityCollect Data
Understand Objectives/ Challenges
• Present Program• Develop Initial
Plan• Interview Key
Personnel
• Collect andAnalyze AP Data
• Discuss PreliminaryFindings
• Provide Benchmark Comparison
• Identify Opportunity• Build Business Case
• Obtain Executive Approval
• Build/ExecuteAction Plan
• Measure Results• Conduct Additional
Analysis
Analysis Process
ExistingProgram
Best PracticeBenchmark
Spend Gap/Business
Case
Opportunity Identification
Average Tran SizeOverall Existing
SpendOverall Existing
Trans Benchmark1 Benchmark Spend Benchmark Trans<$2,500 9,283,431$ 30,945 80% 7,426,745$ 24,756 $2,500 - $10,000 23,019,722$ 7,194 35% 8,056,903$ 2,518
$10,000 - $100,000 41,728,310$ 3,629 5% 2,086,416$ 181 Totals 74,031,463$ 41,767 17,570,063$ 27,455
Benchmark Sample
Financial Benefit Sample
Benefit Category Benefit AmountP-Card Rebate 690,000$ Transaction Cost Savings 409,281$ Cash Float Savings 43,012$
Total Financial Benefit 1,142,293$
P-Card Rebate
Transaction Cost Savings
Cash Float Savings
Closing the Gap - Initial Focus
Start with easy opportunities that require minimal change. Common examples include: Slippage – suppliers that already accept card payment
from your organization but that are being paid via other methods
Suppliers within common card categories Capturing spend that’s currently being made outside of
existing policies.
Program Slippage Report
Supplier NameCardable Avg. Tran
Amount4,171
49928,18835,10820,5401,180
2,362,150 115Total 2,535,554 12,264 207 105,547,234 89,451
GULFSTREAM 70,560 548 129
3,128,905 111XEROX CORPORATION 8,248 20 412 3,124,591 89VERIZON 17,737 113 157
59,562,748 14,279OFFICE DEPOT 19,634 105 187 37,368,840 74,857WW GRAINGER(*P) 2,419,375 11,478 211
MetricsCard Annualized Spend
Amount Card No. of TransCard Avg. Tran
AmountCardable
Annualized Cardable No. of
Trans
Visa Acceptor: YesCardable Payment Methods: CHECK
Excluded Supplier Name: None
Top Suppliers: 75
Excluded Business Unit Name: NoneExcluded Cost Center Name: None
Commercial Card vs. Cardable Spend by Supplier
Client Name: ABC Company
Transaction Limit < 2,428,455Spend Category Name: All
Closing the Gap - Advance to Next LevelApply advanced U.S. Bank payment technologies:
Improved controls/analyticsPost invoice payment with Access Online Payment PlusConsolidated payment file deliveryGhost cards / AP cardsVirtual PaySpend AnalyticsExpense management integrationGlobal travel card issuanceManaged spend / meeting cards
Working Capital DNA
Checks
Card
ACH
Rigorous Evaluation Tools Program assessment / financial benefit Detailed reporting for opportunity identification Peer industry benchmark Best practice diagnostic Dashboard Modeling
Dashboard Modeling Capability
More value and improved performance Schedule follow-up meeting to discuss current
card program performance and preliminary objectives
Next Steps