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THE BIG PICTURE

THE BIG PICTURE

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THE BIG PICTURE

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  1. THE BIG PICTURE

  2. Enhanced Data

  3. The Concept – The Culture

  4. Monitoring and Control • Best Practices

  5. TOP TEN: BEST PRACTICES • NUMBER 10: • USE THE INFREQUENT BAD APPLES AS EXAMPLES • Make consequences known of improper use • “DOD publicizes a shortlist of employees who have been held accountable for illegal or improper use of the card.*

  6. TOP TEN: BEST PRACTICES • NUMBER 9: • ESTABLISHING A MULTI_FACETED STRATEGIC APPROACH TO MONITORING AND OVERSIGHT • GSA mandates that contractors provide electronic reports to agency mangers, that are secure and easy to access over the Internet.* • “A strong training program, state of the art tools,. And a detailed review structure gives federal agencies all the tools necessary to effectively run their card programs

  7. TOP TEN: BEST PRACTICES • NUMBER 8: • TAKE ADVANTAGE OF PREVENTIVE CONTROL TO MINIMIZE EXPOSURE • Merchant Category Code Blocking mechanisms are available from all card providers • GSA publishes a list of MCC codes Govt might consider restricting: GSA’s Blueprint for Success: Purchase Card Oversight Guide

  8. TOP TEN: BEST PRACTICES • NUMBER 7: • MAKE TRAINING MANDATORY • In Testimony to congress, GAO emphasized that effective management or an organization’s workforce, its human capital, is essential to achieving results and is an important part of internal control • USDA issues a tri-fold Purchase Card “Quick Guide” to cardholders to consult as a quick reminder on appropriate use of the card*

  9. TOP TEN: BEST PRACTICES • NUMBER 6: • ENSURE SEPARATION OF DUTIES • Responsibilities of cardholders, reviewing officials and agency program coordinators should not overlap • DOD states: “Separation of duties creates a situation that should preclude errors or attempts at fraud or embezzlement from goingundetected”*

  10. TOP TEN: BEST PRACTICES • NUMBER 5: • IDENTIFY APPROPRIATE OVERSIGHT OFFICIALS AND CLEARLY DELINEATE RESPONSIBILITIES • DOD P-Card Program = approx.. five to seven cardholders to each reviewing official

  11. TOP TEN: BEST PRACTICES • NUMBER 4: • ESTABLISH SPENDING LIMITS COMMENSURATE WITH NEEDS • Cardholders can receive a one-time spending limit increase in the event of a legitimate need to do so. • Annual review of the program should include an assessment of the credit limits, identifying shortfalls or over-allocation

  12. TOP TEN: BEST PRACTICES • NUMBER 3: • BE SELECTIVE IN ISSUING CARDS • Establish an effective approval process • what is the card needed for? • Frequency of use • “ Right cards in the right hands” • credit utilization maximized, tracking minimized

  13. TOP TEN: BEST PRACTICES • NUMBER 2: • COMMIT THE RESOURCES NEEDED TO ACHIEVE SUCCESS • Business Finance Magazine- “Preventing P-Card Plateaus,: • “ don’t cripple program by trying to run it too cheaply”

  14. TOP TEN: BEST PRACTICES • NUMBER 1: • ENSURE STRONG MANAGEMENT SUPPORT OF CONTROLS • GSA: “It is no coincidence that agencies that clearly communicate their intolerance for payment delinquency, misuse and abuse, and hold those who fail to perform accountable, also have the best run card programs”

  15. Technology

  16. CORPORATE CARDSLine of Products • Purchasing Cards • Travel and Entertainment • Fleet

  17. Blocking Features • Corporate Limit • Single Transaction Dollar Limit • Daily / Monthly Card Spend Limits & Number of transactions • Blocking Capabilities – no limit • Country Code • Cash Advance • Merchant Category and Specific Supplier • Single Per Transaction Limit by specific Supplier / MCC

  18. Billing • Day grace • Centralized / decentralized • Electronic vs. paper

  19. Ghost Accounts • Central billed accounts • No plastic • Open account with strategic supplier

  20. Departmental Account • Central billed accounts • Usually has a plastic • Travel expenses or specific group purchases

  21. Diversion Accounts • Consolidation to a central bill • Improve cardholder’s cash flow

  22. Pre-Paid Account • Petty cash • Project management

  23. Declining Balance Accounts • With or without replenishment • Budget, Project Card and petty cash • Consultants or temporary employees

  24. Account Receivable • Anyone’s payable is someone’s receivable • Ghost account • The bank credit card statement becomes the Corporation billing process • Savings attached to automated payments • Eg. Via Rail Canada

  25. The Strategy • Structure • Culture • Technology AN ACTION PLAN

  26. Consultative Program Evaluation • Value Realization (VRP) is a customized consulting service that includes: • In-depth analysis of Accounts Payable • Industry 'Best-Practice' Recommendations • Policy and Procedure Review • Program objectives: • Scope Opportunity • Predict Performance Using Benchmark Averages • Identify and Explore key spend thresholds, top vendors, top commodities and eCommerce opportunities • Track and Celebrate Successes • Rebates

  27. Guy Bilodeau MBA V.P. BMO Spend and Payment solutions Guy.bilodeau@bmo.com