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Introduction To Purchasing Card Principles

Introduction To Purchasing Card Principles. Objectives. At the end of this training session, you will be able to:. Define what a Purchasing Card (P-card) is List the benefits of using a P-Card List the instances when you use a P-Card List restrictions of using the P-Card

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Introduction To Purchasing Card Principles

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  1. Introduction To Purchasing Card Principles

  2. Objectives At the end of this training session, you will be able to: • Define what a Purchasing Card (P-card) is • List the benefits of using a P-Card • List the instances when you use a P-Card • List restrictions of using the P-Card • List your responsibilities regarding the P-Card • List the steps to follow when the products order are defective or incorrect • List the people involved in the Purchasing Card Approval Process • List available Purchasing Card resources

  3. Your Name Your Entity’s Name Bank of America What is a Purchasing Card (P-Card)? • It is a Visa credit card with your name and GSW State University’s name embossed on the card • The credit card is issued by Bank of America to purchase goods/items on behalf of GSW • GSW is responsible for the payment of the goods/items you purchase on the credit card

  4. Purchase is made with P-Card Bank of America Vendors that accept P-Card email GSW – P-Card Administrator SupplierPerformance Audit SpendAnalysis ProcurementProductivity How it all works Behind the Scenes Pay on Order Payment is made with P-Card to vendor – Buyer receives Receipt via email Transaction goes to vendor and into their Merchant Bank Vendor creates Receipt of purchase online Payment

  5. What are the Benefits of Using a P-Card? • Offer the opportunity to streamline the processes of procuring and paying for goods and services • Reduces the administrative process costs • Reduces the volume of accounts payable transactions • Reduce costs associated with small dollar purchases • Streamline purchasing and payment procedures • Reduce the administrative burden • Simplifies and automates the purchasing and payment process • Reduces purchasing cycle time and expedites delivery • Provides management information • Allows reallocation of resources to more “mission critical” needs • Expands number of possible merchants • Increases competition • Typically, 80% of transactions only represent 20% of total dollars spent

  6. Consider the Benefits of the Purchasing Cards 1/2 to 1 Day 1 to 2 Days 1/2 to 1 Day 5 to 6 Days 1-2 Days 1 to 2 Days

  7. Consider the Benefits of the Purchasing Cards X X 1/2 to 1 Day 1 to 2 Days 1/2 to 1 Day X X X X X 1 to 2 Days 5 to 6 Days 1-2 Days

  8. Consider the Benefits of Purchasing Cards Purchasing Cards improve procurement cycle times • According to the 2005 Purchasing Card Benchmark Survey*, the average procurement cycle is reduced by 6.3 days • Suppliers are paid within 48-72 hours of a posted transaction • Employees receive goods/services faster Procurement cycle is reduced by 68%* (determination of employee need until the receipt of ordered goods 9.26 days Avg. cycle time with traditional PO method 6.3 days Resulting cycle time reduction with P-Card 2.96 days Avg. cycle time of P-Card transaction + = *RPMG Research Group

  9. $31.30 The total cost associated with payment for good and services (including receipt and matching of invoices, purchase orders, receiving documents; approval workflow for payment, disbursement of funds; mailing/transmitting payment; post-purchase accounting for transactions; and reconciliation of disbursement with bank records) $7.60 $31.75 $5.71 The total cost of the purchasing process (including activities to requisition a good, approve a purchase, and generate and deliver a purchase order to supplier $26.16 $8.52 The total cost of sourcing (including specification of requirements, supplier pre-selection, transmittal of requirements to suppliers, receipt and evaluation of supplier quotations, supplier selection, and contracting $89.21 $21.83 Consider the Benefits of Purchasing Cards Cost breakdown of Traditional PO and P-Card Transactions* POPurchasing Card *RPMG Research Group

  10. Consider the Benefits of Purchasing Cards The elimination of process steps results in transaction cost savings • According to the 2005 Purchasing Card Benchmark Survey*, the average cost of a traditional PO based process was reported by respondents to be about $90 • The average cost of a Purchasing Card transaction was estimated to be about $22 A process cost reduction of $68,000+ for every 1000 transactions migrated to P-Card $89.21 Avg. cost of traditional PO method $21.83 Avg. cost of P-Card transaction $67.38 Resulting cost reduction with P-Card = + *RPMG Research Group

  11. When you purchase a small-dollar non-equipment item (Less and equal to $100 with prior approval from IIT. The approval form is available on the Business Forms page) When Do You Use a P-Card? When you purchase a small-dollar supply item When you purchase off a statewide or agency contract that accepts the purchasing card When you pay for a minor repair on office, warehouse, or lab equipment

  12. Over the counter (point of sale) By fax By telephone Over the internet Where Can You Use a P-Card? Your monthly limit is based on expected P-Card use Your department determines your P-Card limits

  13. Cash Advances Authorized personnel with approved travel can purchase airline tickets and in-state SWC car rentals as well as pre-approved athletic and team travel with the P-Card Travel, Entertainment Motor Vehicle Fuel Professional Services (doctors, lawyers) Some of the Restrictions You cannot use your card to pay for:

  14. Gift Cards are considered Cash Food / Gift Cards Personal Purchases or Foundation Purchases Split Purchases Purchasing same item, but paying in split payments Some of the Restrictions You cannot use your card to pay for:

  15. Sign an Employee Agreement Form Employee Agreement • Contact P-Card Program Administrator/Coordinator if… • Your name changed • Department Changed • Phone Number Changed Keep your card in a secure location at all times Never share your card Things You Must Do Regarding Your P-Card…

  16. Renew your P-Card every two years Every 2 Years Review and reconcile the Bank of America billing information within WORKS Follow the established single transaction limit: less than $5,000 Notify P-Card Program Administrator/ Coordinator if you need to raise your limits or need an exception to established P-Card Policy $4,999.99 What Rules Do You Follow?

  17. Things You Must Do Regarding Your P-Card… • Ensure complete understanding of GSW’s reconciliation process • Maintain a copy of all receipts • Review and maintain reconciliation documents • Follow the procedures regarding Cardholder approvals • Follow the established purchasing guidelines • Maintain adequate documentation (WHAT, WHY, WHERE/location) • Tape ALL small receipts to an 8-1/2 x 11 sheet of paper • Summary Sheets due by the 10th of each month by 3 PM

  18. Sales Tax Things to Watch For… Make sure that Sales Tax is not charged on your purchases • What happens if you realize you were charged for Sales Tax: • a. Contact the vendor immediately and document your actions • b. Have the Vendor issue a credit for the sales tax amount • c. If the Vendor refuses or is unable to refund the sales tax, document their response and keep with your receipts. The Tax and Use Form is available on the Business Forms page

  19. When Is Your P-Card Suspended? • you do not follow the State’s and GSW’s policy and procedures • you do not complete your reconciliation process in a timely manner (due by the 10th of each month by 3 PM) • of habitual misuse • of fraudulent activity. When this is the case, you will be terminated and prosecuted Your P-Card can be suspended because…

  20. When Do You Cancel Your P-Card? • you are leaving employment • you are taking extended leave from your job Your can cancel your P-Card when…

  21. What Happens When the Product is Broken or You Did not Order It? • Contact the vendor immediately and document your actions • If you are unhappy with the vendor’s response, contact your Purchasing Card Program Coordinator to initiate a Dispute • If you do not recognize a charge, contact the vendor for a proof of purchase or delivery • If you suspect fraudulent activity – contact your Purchasing Card Program Coordinator immediately for further instructions

  22. Who is in the Chain of Command? Statewide Purchasing Card Program Manager Entity’s Purchasing Card Program Administrator (APO or CUPO) Entity’s Purchasing Card Program Coordinator Entity Accountant Entity Reviewer/Approver Entity Cardholder

  23. P-Card Program Resources To review GSW’s Purchasing Card Policy, go to the Business Forms page and click on Procurement Card Policy To review Georgia State Purchasing Card Policy and on-line resources: http://statepurchasing.doas.ga.gov/00/channel_title/0,2094,35226973_36298628,00.html

  24. P-Card Program Resources • To review WORKS Payment Manager on-line training materials: https://payment2.works.com/wpm/bookmark To contact P-Card Administrator: nrooks@gsw.edu To contact P-Card Coordinator: atallent@gsw.edu

  25. Questions?

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