Effectively on-board suppliers to avoid the re-board blues.

July 16, 2014 Lynn Larson

Fasten your seat belts. Convincing suppliers to accept P-Card or enroll in your Virtual Card program can be turbulent at times. To make the journey smoother, think 3-1-1. Three primary activities—preparation, execution and follow-up per each (one) supplier for the desired (one) type of card program, whether P-Card or Virtual Card. However, before going to the supplier level, your organization needs a clear flight plan in the form of a payment strategy that best fits its business and goals. Refer to the previous blog post on regaining a broad perspective.

Ready for Takeoff?

Take off smoothly and stay out of the turbulence with your supplier enrollment campaign.

Within your enrollment strategy, incorporate education for the supplier about the benefits of P-Cards or Virtual Cards and how, exactly, the purchase-to-pay (P2P) process will work. You do not want to on-board a supplier only to have that supplier drop out of the program later because they didn’t understand what it entails. Re-boarding a supplier can be tougher than the initial on-boarding.

Additional Strategies

At the IFO Fusion conference in May, supplier enrollment strategies were shared by Matthew Dragiff, Vice President, Product Development, AvantGard Payment Services, SunGard. His session pertained to Virtual Cards, but his tips also apply to P-Cards:

Understand the supplier/buyer relationship and determine the best approach or tone to take for each supplier. Will you simply offer, strongly encourage or mandate your card program?
Create customized communications (e.g., campaign letters) for each type of tone.
Once a supplier enrolls, do not keep sending a check payment. This is confusing to the supplier (and keeps your program in a holding pattern!).

If a supplier declines participation, document why. Plan to follow up again with the supplier at a designated time (e.g., in nine months) in case something changes. See more on the related webpage.

A Smooth Landing

Adding to Matthew’s tips, I suggest more follow up efforts with enrolled suppliers:

Adjust your AP system/supplier records accordingly to indicate the preferred payment type.
Monitor spend with enrolled suppliers to verify they remain on track. An air pocket drop in monthly spend with a particular supplier could indicate your organization reverted back to another payment method. I learned this lesson firsthand.

The Value of Monitoring Spend

During my time as a program manager, I discovered, through a P-Card spend-by-supplier report, that P-Card volume with a key supplier went from thousands of dollars per month to none. The cause was employee turnover. The new person started using a different P2P process. Her manager did not notice nor did AP, who processed the check request. It required some work to return the supplier to P-Card payments.

Supplier enrollment does not need to be painful, but you do need to prepare for the trip.

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…

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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.

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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.