In need of compliance reinforcement?

June 26, 2014 Lynn Larson

Developing controls is one thing. Compliance is another matter. I recently read an AOC Solutions’ blog post about the Verizon 2014 PCI Compliance Report. It cites that nearly 60% of companies do not regularly test their data security systems and processes, even though this is a requirement of the Payment Card Industry Data Security Standard (PCI DSS). Does your P-Card program suffer from similar low compliance in one or more areas? What do your compliance metrics show?

I previously wrote about declined transactions and delinquent cardholders, but there are more potential issues; for example:

incidents of personal use of a Commercial Card
purchasing prohibited goods/services
improper card storage (e.g., cardholders leaving cards on their desks when they are not there)
improper disposal of cards or documentation reflecting card account information
sharing system login IDs and passwords or posting the information next to a computer
cardholders allowing someone else to use their card
suppliers who are not PCI-compliant (the Verizon report will make you think twice about what your suppliers are doing)

A good auditing program is critical to catching and resolving compliance problems, but prevention is equally important. Do your policies and procedures (P&P) address the bullet points listed above? For tips on what P-Card P&P should include, purchase the related guide for $29.99. What about your training program? P-Card training should complement other organization training, such as training focused on ethics and information security. If your organization could use help with any of these efforts, contact Recharged Education.

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

Subscribe to the Blog

Metrics are worth revisiting.

June 18, 2014 Lynn Larson

How do lessons learned from an appendicitis apply to P-Card metrics? I had the chance to ponder this recently while hospitalized for an emergency appendectomy. It’s an odd comparison, but four things stand out to me that are relevant in both cases. (Yes, I coped with a lot of boring down time in the hospital.)

Metrics help you determine the health of your P-Card program.

Information is Valuable

Tests were needed to confirm my diagnosis. Similarly, you cannot determine the health of a P-Card program without various tests in the form of metrics. There could be something wrong that you can’t see unless you review specific data; for example, process costs and savings, P-Card usage/progress toward goals, inactive cards and declined transactions. Learn more about metrics...

Pay Attention to What’s Important

Just as ignoring an appendicitis is not wise, ignoring P-Card metrics could result in lost savings, increased program risk, decreased program buy-in, etc. Too often, organizations generate P-Card reports, but do not do anything with them (see last section of related blog post). Utilize the valuable information.

Weigh Your Options to Make Informed Decisions

My doctor gave me the options of taking an ambulance to the hospital or getting a ride. When choosing (the ride), I considered various factors—cost, time, pain level and test results. Before taking action within your P-Card program, evaluate whether a particular metric:

is an anomaly (good or bad), warranting further scrutiny to determine the cause
indicates a chronic problem in need of resolution
represents a positive trend to be promoted

Avoid hasty decisions, such as restricting card usage in response to negative compliance metrics or putting the program on auto-pilot when positive metrics emerge.

Communicate Effectively

A patient’s reported symptoms and history—documented within the medical chart—provides necessary insight to a medical team (like “her blood pressure really does run that low”). Sharing your P-Card metrics furnishes insight to your organization. Use multiple channels to reach different audiences:

post to your organization’s Intranet, so all employees can access
provide to management in summary form with graphs and charts
schedule a meeting with key stakeholders to discuss a diagnosis that needs to be addressed

Unlike a useless appendix and an appendectomy that is “one and done,” P-Card metrics are integral and ongoing. Giving your program a regular checkup should be a priority, not an afterthought.

About the Author

Subscribe to the Blog

Rebates rehashed, part 2—maximization tactics.

June 10, 2014 Lynn Larson

When you steer clear of the dark side of rebates (the last blog topic), you can focus on how to best maximize your incentives. How is your P-Card program performing in this regard? Do you know the specifics of your rebate contract terms? Following are three common factors; see more on the related webpage.

Average Net Spend per Card

If your rebate calculation involves this metric (total spend divided by average number of cards), you can make the average higher/better by closing inactive or under-utilized cards. This is a simple administrative action that can also reduce risk. Regardless of rebate, addressing such cards is a best practice. Ensure your organization defines inactive as part of its policies (e.g., nine months of no activity) and has procedures for taking action. The internal agreement that employees sign prior to obtaining a card could also include a stipulation that your organization reserves the right to close inactive cards.

File Turn/Speed of Pay

How quickly do you pay your card issuer? If your rebate incentives reward quicker payments, then work with your treasury/finance department to evaluate the benefit of paying more quickly against the value of holding on to your cash longer. Do not allow payments to your issuer to be delayed by cardholders’ reconciliation of transactions, which should be a separate process.

Total Annual Spend

Last, but not least, maximize card spend to improve your rebate and, more importantly, increase process efficiencies and savings. You should have a policy stating that all purchases under a certain amount (e.g., $2,500) must be paid via P-Card if a supplier accepts it. Enforce it!

Increase card limits and unblock MCC restrictions accordingly to support the policy.
Educate employees about P-Cards and how they benefit your organization.
Train procurement and accounts payable staffs to decline PO and check requests when a P-Card should be used.
Quantify and report the missed opportunities, such as the lost process savings, to management.

Is your P-Card program producing savings or leaking missed opportunities?

Maximizing rebate incentives through good decisions, policies, and procedures is just one aspect of a successful P-Card program. Access additional tips from past blog posts and other complimentary education.

If your organization needs assistance with identifying improvement areas, consult with your card issuer and/or submit a contact form to Recharged Education to relay your needs.