Four tips for repaving the path to P-Card success.

November 11, 2014 Lynn Larson

How do you take a leadership role and drive Commercial Card program success, especially if you lack card experience? Obtain tips from a pro who has been there and done that. Tiffany Lovelace, CPCP, Kansas City Southern, has taken a P-Card program from stagnant to sensational, including 150% growth in volume over four years! Following are her words, which are part of a three-page series about her journey and card program transformation.

Make Use of Your Unique Skills

If you have inherited a program, but lack direct card experience, don’t let that be a barrier to success. Embrace your inherent skill sets and transition them to the world of Commercial Card payments. I had no experience in Commercial Card payments or in the accounts payable arena. What I did possess was the knowledge and fortitude to successfully evaluate and market programs and products.

Build Strong Relationships

Build strong and consultative relationships with: (1) other organizations within the Commercial Card space, (2) your issuer and (3) internal peers.

Humility is a good thing. While you may have moved mountains in your previous positions, leaning on industry experts, admitting you do not have all the answers, and exerting the willingness to educate yourself will help pave the way for success.

Break the barriers standing in the way of your success and that of the card program.

Sync Up Your Strategy

We have a saying in our department: If it makes sense, do it. Our organization was willing to rethink how we utilize Commercial Card products and services. We created program goals and objectives to be in sync with accounts payable, strategic sourcing and treasury, as all three business functions are critical elements, contributing to the overall program success.

Market, Market, Market

My expertise in marketing provided the opportunity for our team and super users to become an extension of our issuer’s account management team. We launched surveys, formed focus groups, and created process maps to unveil issues plaguing our program. With this new-found knowledge, we birthed a new program and crafted targeted messages for our marketing campaign to promote solutions across our organization.

Read the complete series to gain additional tips from Tiffany.

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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Recast your ballot: Does BIP or SIP win your vote?

November 3, 2014 Lynn Larson

Given the various candidates, how do you choose an ePayables solution that will best serve your needs? As with voting in a political election, you do not want buyer’s remorse later. If you think of ePayables as a two-party system, the two major options are buyer-initiated payments (BIP) and supplier-initiated payments (SIP), with possibly some independents sprinkled in. Which one is right for you?

One Provider’s Opinion

I asked Bora Payment Systems LLC (“Bora”), a business-to-business BIP solution provider, about their views. Of course they campaign for what they offer, but they were also quick to point out that the “best” AP system is one that:

matches the needs of the buying organization and
meets any existing contractual terms with suppliers

Bora explained certain end-user (payer) and supplier (payee) attributes that often lend themselves to one option or the other. For example, consider your annual AP card spend (actual or targeted) and the frequency of payments to each supplier.

SIP can be a good choice if annual AP card spend is less than $5 million and there are many non-recurring payments to suppliers. Conversely, BIP is ideal when 10% to 20% of suppliers receive 80% to 90% of payments. Per Bora, end-users who benefit from BIP include healthcare/medical organizations, universities, large corporations, etc.

Read the complete input provided by Bora.

Rock-paper-scissors is no way to decide your payment strategy. Do your research and then demonstrate your support for what best meets your organization's needs.

ePayables In Review

With an ePayables solution, the end-user organization receives and approves a supplier’s invoice through its established processes. In this way, it mirrors a traditional purchase-to-pay process, making it different than a streamlined P-Card process. Following invoice approval, the end-user initiates payment to the supplier through its card issuer/provider, usually by providing a “payment instruction file” or similar. Then, depending on the specific solution (some providers offer more than one), the supplier either:

processes a charge transaction for the approved amount to a designated Virtual Card account number; this reflects the supplier-initiated payment (SIP) option or
receives payment directly through the card rails and its merchant account, which is reflective of buyer-initiated payments (BIP)

Learn more...

What Do You Think?

Do you agree with Bora's input? What else would you add about BIP versus SIP? I encourage you to comment below. Please do not bash a particular provider or solution!

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Refortify your cardholder agreement for added control.

October 21, 2014 Lynn Larson

How complete is your internal agreement that cardholders and their managers sign? Below are eight sample statements, from my P-Card policies and procedures guide, that could be included within a single agreement that covers both roles—cardholder and manager (reviewer/approver).

While most organizations already utilize such an agreement, I recently met end-users who were looking to improve what they implemented when the card program was first launched. Could yours be refortified to improve P-Card program controls? Ensure your legal team and/or human resources department has reviewed and approved it in advance.

The Introduction

Explain the purpose; for example:

Your participation in the P-Card program includes many responsibilities to help ensure the security, health and success of the program. Your signature below represents that you understand your role, and the related policies and procedures, and agree to comply with them.

The Body

Within the agreement, include content about:

who owns the card
who can use it
prohibited purchases
requirements for program participants
ongoing responsibilities
why the card could be canceled
when it must be surrendered
consequences for misuse/abuse

An internal agreement is a common P-Card preventative control.

Definition

An internal agreement is a document that specifies the Purchasing Card-related role(s), associated responsibilities and consequences for non-compliance. The employee signs the agreement prior to card issuance to represent that he or she understands the role and agrees to comply with the requirements.

Eight Sample Statements

Even though a card is issued in an employee’s name, it is the property of [Company].
[Company] prohibits personal purchases on P-Cards.
The cardholder is the only person authorized to use the card for business-related purposes.
You must successfully complete P-Card and any related training prior to card issuance and on an ongoing basis, as described within the P-Card policies and procedures.
You are part of an important line of defense against card fraud. To protect [Company] and its assets, you must follow [Company’s] Information Security Policy and: a) ensure the card is kept secure, along with related account information; b) complete the transaction reconciliation and review process outlined for your role within the P‑Card policies and procedures; c) immediately report a lost, stolen or compromised card.
A cardholder must cease using the P-Card and surrender it upon employment termination or as requested by management.
The program manager, after notifying you, may cancel the P-Card due to insufficient usage.
Violation of company and/or P-Card policies and procedures may result in disciplinary action, including termination. [Company] may also seek legal action in the event of card fraud involving any [Company] employee.

Need additional help with revitalizing your P-Card policies and procedures? Purchase the related guide.