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Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank

BRINGING ROI TO YOUR BOTTOM LINE: COMMERCIAL CARD SOLUTIONS & TECHNOLOGY. Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank Robin Hanselman, Director Sales US West Chrome River Stephen White, Director Corporate Sales Chrome River. September , 2014. Agenda Overview.

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Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank

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  1. BRINGING ROI TO YOUR BOTTOM LINE: COMMERCIAL CARD SOLUTIONS & TECHNOLOGY Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank Robin Hanselman, Director Sales US West Chrome River Stephen White, Director Corporate Sales Chrome River September , 2014

  2. Agenda Overview Commercial Card Best Practices Sherry Hibbs – Featuring Statistical Information on Payment Solutions Expense Management Technology Best Practices Robin Hanselman & Stephen White – Featuring Technology Solutions Q & A Round Table Sherry Hibbs, Robin Hanselman & Stephen White 1 2 3

  3. Commercial Card Best Practices

  4. IntroductionSherry Hibbs, VP Sales & Relationship Management BMO Harris Bank • Over 25 years of Commercial Card industry experience.  • Professional experience includes senior management Commercial Card positions for card issuers - Citicorp Diners Club, US Bank, JPMC/Bank One and Bank of Oklahoma (BOKF). • In addition, professional experience includes working as the VP of Strategic Alliances for WorldTravel Partners/BCD Travel (3rd largest global travel management company) driving strategic payment solution alliances. • Strategic selling and management experience in all corporate market segments which includes Fortune 500, large, middle and small market companies.

  5. What are Commercial Payment Solutions • Types of Commercial Charge Cards: • MasterCard • Visa • American Express • Discover • Diners Club • JCB E-Payables Event Cards Declining Balance Cards Fleet Cards One Card Solution Travel & Entertainment Cards Purchasing Cards Ghost Accounts Virtual Cards Project Cards Meeting Cards Accounts Payable Cards

  6. U.S. Commercial Card volumes are projected to grow significantly faster than GDP 25% 20% 15% 10% 5% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 -5% -10% GDP Growth Commercial Card *Sources: Glenbrook Commercial Card Sizing, 2012; MasterCard Analysis, 2013

  7. The untapped Commercial Card opportunity is tremendous in the U.S. and Canada U.S. Middle Market Segment Canadian Middle Market Segment $7.8T1 $1.0T4 Total Spend Estimate $1.9T2 $180B4 Cardable Opportunity $121B3 $11B4 Carded Volume Only 1.2% of total Middle Market spend is currently captured on card Only 1.6% of total Middle Market spend is currently captured on card Sources:1D&B, 2013; 2B2B International SME research, 2011; 3Nilson, 2012 & MasterCard Analysis, 2012; 4Kaiser Associates, 2012 & MasterCard Analysis, 2013

  8. Enhanced Spend Analysis – Realign Forms of Payment Source: First Annapolis Consulting / Commercial Card Market Landscape February 2012

  9. Working Capital Management

  10. Benchmarking Peer Groups • Payment Method Analysis • Air /Hotel /Car Rental Price Audit • Rewards/Rebates • Compliance • Technology Usage Travel & Entertainment Card Best Practices

  11. The Value of P-Card vs. Traditional Purchase Order Process Using a P-Card vs. a traditional Purchase Order process saves almost $74 per transaction $90.77 $73.53saved $17.24 Source: RPMG, 2012

  12. Breakdown of the Value of P-Card vs. Traditional Purchase Order Process Using a P-Card generates savings during the sourcing, procurement, and invoice/payment/reconciliation process Breakdown of Value of P-Card vs. PO Process Source: RPMG, 2012

  13. What can you expect from your card provider? Card Benefits and Features

  14. Card Controls This feature provides the ability to limit or block Cardholder purchases made by Merchant Category Codes (MCC). This feature has the option of restricting card usage to specific merchant types such as hotels, restaurants or office supplies. MCC Restrictions Ability to limit purchases to specific vendors and locations or block expenditures by specific supplier and location. This feature was developed at the request of corporate clients wanting to maximize arrangements on blanket orders and to allow high value transaction purchasing. Specific Supplier Blocking

  15. Protecting Against Fraud & Misuse Card number and expiry passed through authorization system for accuracy, Card Validation Code (CVC) is passed and evaluated, status of card (open, closed, suspended) and available credit is checked. The authorization will be denied if any of these evaluations fail and merchant may be asked to retain card. Merchant requests Cardholder to provide identification to validate authenticity If authorization successfully passes card validation, authorization system recognizes the commercial card type, and evaluates the transaction against any organization card controls. The authorization will be denied if the transaction evaluation fails any of the pre-set controls. Authorizations undergo sophisticated review for indications of possible fraudulent use. Many fraud systems are a stand-alone platform which receives and stores real-time feed of transactional authorization responses and submits each incoming transactional authorization to a comprehensive evaluation process. All attempts to authorize a transaction on a card product pass through four distinct processes: Card Validation Physical Evaluation Card Blocking & Controls Early Fraud Detection Evaluation Commercial Cards provide significantly less risk than other methods of payment than an organization may have in place today.

  16. Data Enables Efficiency 76:00 Minutes Enhanced data brings significant efficiency to your expense reporting system. 17:00 Time for clerical/accounting personnel to reimburse expense report and reconcile payment to bank data 35:00 Minutes Overall Savings: 54% 20:00 7:00 Time for clerical employees to process and prepare an expense report for payment 11:00 8:00 6:00 28:00 Time for supervisors to review an expense report submitted 14:00 Time for traveler/cardholder to fill out an expense report Paper Based Electronic Pre-populated Source: RPMG 2013

  17. Expense Management Technology Best Practices

  18. Introducing Robin Hanselman Director Sales US West Chrome River • Robin’s background is in Finance and Accounting where she spent a number of years working as a CPA. • After finding out how much easier the right financial programs and technology can make life, she has spent the last 15 years consulting and selling financial technology solutions • Technology platforms have included everything from ERP to Investment Accounting and Accounts Payable automation • Robin has worked across many different industries and is currently specializing in Professional Services organizations such as accounting, architecture, consulting, engineering, and law firms here at Chrome River

  19. Introducing Stephen WhiteDirector Corporate Sales Chrome River • Stephen has over ten years in the spend management space.  • Technology platforms delivered include Concur and Chrome River. • Customers such as Celanese, Waste Management, The Staubach Company, Oxea, JC Penney and HQ Global. • Stephen was hired by Chrome River in 2012 to help drive Corporate sales growth. He currently resides in Phoenix, AZ yet is ready to get back to his home state of Texas.

  20. Best Practices Technology Differentiators Simple and Intuitive to Use • User-focused design • Completely configurable Business rules engine • Most powerful workflow • Highly flexible policy configurations Ease of Integration • Financial Systems – enterprise data exchg • Billing systems, Payroll, Projects Broad Accounts Payable Automation Platform • EXPENSE, INVOICE, PO, ANALYTICS 1 2 3 4 1 2 3 4

  21. Expense Management Technology Best Practice #1: Automate Expense Capture

  22. The Argument Against “Free” • A manual expense report costs between $20.18 - $51.35 to process • An optimally automated expense report is significantly less to process, ranging between $6.25 - $7.60 • A manual invoice process is between $14.04 - $16.67 per invoice • An automated invoice is again significantly less • ranging between $3.34 - $8.32 • Partially automated processes provide some cost savings but significantly less than optimally automated processes Source = PayStream Advisors

  23. Automatic Expense Capture - Example

  24. Simplify Receipt Capture Snap and Send

  25. Expense Management Technology Best Practice #2: Have an Accountable Plan

  26. What is it and why is it important? An Accountable Plan is an employee reimbursement allowance arrangement or method for reimbursing employees for business travel expenses that complies with IRS regulations. If you cannot demonstrate that you have an Accountable Plan, expense reimbursements may be considered taxable income and 1099s must be provided to the employees incurring the expenses!

  27. Basics of an Accountable Plan According the IRS: • The expense must have a business connection • Expenses must be submitted in a timely manner • Overpayment of expenses must be returned in a timely manner

  28. Accountable Plan - Further Clarification • An advance received within 30 days of the time the expense is incurred • Expenses are adequately accounted for within 60 days after they are paid or incurred • Excess reimbursements (anything paid over and above the allowable amounts) are returned within 120 days • An employee provides an adequate accounting of outstanding advances within 120 days of receiving a periodic statement

  29. Accountable Plan - Further Clarification - Example

  30. Expense Management Technology Best Practice #3: Automate Policy Enforcement

  31. Business Rules Engine • Configurable Expense Policies • Configurable Approval Routing Rules • Configurable Tax Rules, etc.

  32. Example - Built in Compliance Rules

  33. Example - Client Specific Compliance Rules

  34. Expense Management Technology Best Practice #4: Have a Clear Approval Process

  35. Suggestions for Approval Process • Consider roles and responsibilities • Consider how many levels of approval something truly needs • Would some expenses be best suited for Pre-Approvals? • Where do you want Finance in the process? • Re-think your expense audit practices • Let the system do the ‘dirty work’ whenever possible

  36. The Value of Automated Approval Workflow • Remember the Business Rules Engine at work? • By automating the process, you can now have approvals that are triggered by specific compliance issues. • This eliminates the need to audit 100% of 100% • A much better use of valuable high-level approvers’ time.

  37. Consider Mobile Approval Methods Approval on the go!

  38. Expense Management Best Practice #5: Go Green - Eliminate Checks

  39. Streamline your Payment Process • Direct ACH payments now the norm • Less potential for fraud and duplicate payments • More efficient, less work for A/P • For BOTH employee reimbursements and vendors

  40. Other Benefits • Cost savings • No more paper checks and manual processes = savings • Efficiency • More timely payments • Enhanced Compliance

  41. Expense Management Technology Best Practice #6: “Leverage your Leverage” Through Analytics and Reporting

  42. Some Key Reporting Metrics #1 • Analyzing spend by Expense Category BENEFIT – negotiate preferred relationships with vendors • Aggregating expenses associated with Business Development or events BENEFIT - meaningful insight to ROI of these activities

  43. Some Key Reporting Metrics #2 • Analyze Expenses by Client or Project BENEFIT – Determines the ROI of a fixed fee project.

  44. Some Key Reporting Metrics #3 • KPI’s can be created on Open Approvals or Aging BENEFIT – Remedy bottlenecks in reimbursement cycle time • Compliance reporting BENEFIT – Can help spot individuals or groups that are at higher risk for policy violations

  45. Q & A Round Table

  46. THANK YOU! Sherry Hibbs, BMO Diners Club/MasterCard Robin Hanselman, Chrome River Technologies Stephen White, Chrome River Technologies

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