16 tasks for card program fitness.

December 28, 2016 Lynn Larson

How fit is your card program? Nearly two years ago, I provided a list of 12 housekeeping tasks that help keep a program in good shape. A reader recently contacted me about annual program maintenance, so, as 2016 wraps up, I am offering the complete list again. It has grown and evolved into 16 items to review and consider at least annually.

Annual Tasks

Some are operational and some are strategic. Together, they create a solid foundation for any card program.

Get your program ready for a great 2017.

Revise dated information, such as transaction reconciliation deadlines that cardholders must follow in the upcoming year.
Ensure P-Card policies and procedures are accurate, and look for opportunities to improve the appearance and clarity.
Execute mandated annual refresher training for cardholders and their managers.
Evaluate cardholder activity for the prior year to identify inactive or under-utilized cards and address accordingly. In conjunction with this, determine whether additional employees need cards.
Review the appropriateness of card limits and merchant category code (MCC) restrictions. Too many temporary adjustments during the year to accommodate legitimate purchases indicate a mismatch between your controls and program goals.
Update your P-Card program risk assessment.
Publish key program metrics online, such as annualized process savings, and develop a summary specifically for management. Using graphs can be an effective way to share program status at a glance.
Consult with accounts payable regarding the potential need for a rebate accrual entry or adjustment.
Upload current accounting/budget codes to your program management system, if applicable. Some organizations pre-populate budget code drop-down menus. This allows cardholders to select (versus key in) the right codes, if different from any default codes, when reconciling transactions online.
Confirm that your issuer’s records of your cardholders are accurate and complete. You might find discrepancies ranging from minor (e.g., the wrong address for someone) to significant (e.g., issuer shows an open card account that you thought was closed). You might also see gaps, such as missing phone numbers. Learn more…
Provide updated cardholder information for the organization’s business continuity/disaster recovery plan. If your organization does not require annual training on the plan, then consider sending an overview to cardholders and their managers as a reminder.
Review the job description for the program administrator/manager (PA/PM) role. Does it accurately reflect the role and associated requirements?
Determine if there is an appropriate backup for the PA/PM.
Assess your organization’s relationship with the card issuer. Are there any unresolved issues? Are they meeting your needs? How can you improve the relationship? Confirm when your contract expires, so you are not caught off-guard.
Consider whether your organization could benefit from adding another card type, such as Declining Balance Cards (e.g., project/meeting cards) or Virtual Cards, to round out your payment strategy and resolve a pain point.
Identify program priorities for the year ahead. Besides adding another card type, is program buy-in lacking throughout the organization? This should be addressed prior to attempting program expansion. Could additional technology make a positive impact? Before pursuing, see reasons why some technology projects fail. These are just a couple examples. To help you rate various components of your program and identify priorities, download a simple spreadsheet from Recharged Education.

Make 2017 a strong year for your card program. If your organization would like assistance from an external resource, submit a contact form and learn how Recharged Education can help.

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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Preventing panic during an emergency.

December 18, 2016 Lynn Larson

How would you rate your organization’s emergency response plans? I wrote about this topic two years ago, sharing how the employer of one card professional had overlooked many details. I’m bringing the issue up again because of the recent news of water contamination in Corpus Christi, Texas. My parents-in-law spend the winter there, so I heard first-hand accounts of the situation. Does your organization have water contamination on its radar? The extent to which this type of disaster would affect your organization depends on your business, but it may have broader reach than you think. The only way to become more prepared for any situation is by completing needs assessments, as described below.

Water Contamination

In the Corpus Christi area, the initial communications instructed citizens and businesses to not use water for anything, including bathing, because a chemical used in asphalt may have contaminated the water supply. The water still would not be safe even after boiling. In an office setting, this is manageable (at least in the short term), but many industries rely on water—agriculture; healthcare; manufacturing; and commercial kitchens in restaurants, schools, office cafeterias, etc. Imagine the impact at home and work.

Emergency Purchases

Everyone is competing for the same necessary items. Obviously, the most important one is bottled water. Other purchases include hand sanitizer; cleansing cloths/baby wipes; and disposable plates, cups, and so forth to prevent washing dishes in contaminated water.

Planning Ahead

I contacted an AP professional who works for a senior care facility in Minnesota. She confirmed that her organization follows a state mandate to have an alternate source of water, so they have a contract with a local bottled water company. In short, they have to calculate their water needs (the quantity of water needed per resident per day) and the bottled water company has to be able to comply with those requirements. This brings us to needs assessments—the process of:

identifying possible scenarios that could affect your organization (e.g., natural disasters, fires, water contamination, etc.), and
determining what would be required for an emergency response and business continuity

No need for a panic button. Solid preparation now can help your organization effectively respond to an emergency.

Needs Assessments

Consider the following types of questions for different kinds of emergencies/disasters, as each one will likely require a unique response.

How would your organization be affected? Would it be business as usual for all employees or would you close for any length of time? Would you utilize a contingency site, if applicable?
What would your organization need to purchase?
Which vendor(s) would be able to meet your anticipated needs? Is it possible to set up related contracts now?
Who would be responsible for buying what is needed? Do they have a card today?
What will you need to do concerning card spend limits and MCC restrictions?
What will be the purchasing process? Ideally, you want to avoid having your buyers stand in long lines with citizens buying the same items.

If your organization has not addressed these kinds of things, it could be left scrambling if/when an emergency occurs. It is better to take the time now to plan ahead. Learn more...

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University pilots SET Cards to reduce cash.

December 12, 2016 Lynn Larson

Declining Balance Cards do not receive the same press as other Commercial Cards, but they can be a powerful part of your card program. Missouri State University is embarking on this path now—piloting a type of Declining Balance Card commonly known as a Single Event Travel (SET) Card—to get away from travel cash advances. Following is my interview with Isaac Balasundaram, Procurement Card Coordinator for the university. Learn about their SET Card plans, including some early successes and challenges.

The Driver

Q: You noted that a driver for piloting SET Cards is a desire to move away from cash advances. Can you elaborate?

A: The cash advances, especially ones for our Study Away groups, often equate to large sums of cash that are deposited into an individual’s personal bank account or carried by someone as they travel. The SET Card provides so much more security and control. Today, if they run out of cash on their trip, they have to take money out of their personal account to be reimbursed after the trip is complete. Our initial focus for SET Cards is our Study Away groups, but I would eventually like to use them as a substitute for all cash advances issued by the university.

Program Management

Q: Who will manage the SET Card program—the same team/person who manages the other cards?

A: Yes, as the Procurement Card Coordinator, I am managing the program and we have developed a SET Card policy and process.

Application Process

Q: Please describe your application process.

A: The application form, designed specifically for SET Cards, includes fields for key information, such as travel dates, location, and purpose; estimated expenses for the trip; and the corresponding card limits needed. It also includes the terms and conditions for SET Card use, which align with our travel policy, and spaces for the appropriate signatures. As part of the policy, we are mandating training for any SET cardholder prior to card issuance.

Cardholder Accountability

Q: After a trip, will cardholders need to complete an expense report?

A: Yes, we developed a new expense report form. Cardholders will complete and submit it once the trip is complete, along with their receipts. Their department will also submit a cardholder statement obtained from the bank system, so we have a match to the expense report to make sure there is nothing on the card that the cardholder did not report.

Per policy, any unauthorized charges on the SET Card will be added to the individual’s accounts receivable after the trip is complete.

Single Event Travel (SET) Cards can be a way to reduce cash advances and the issues that go along with managing cash.

The Pilot Phase

Q: What does your current pilot phase entail?

A: The cards are issued by the bank in batches of 25. There is a two-week processing period, so I have already requested and received the first batch of cards. The first “pilot trip” is to Costa Rica in January. That will really tell us if this program will work for these types of situations.

With the Study Away groups, they have to prepay many expenses, so, even though the actual trip may be in March/April, they will be issued the card now—in December. The card for the Costa Rica trip was issued a couple weeks ago, so the cardholder can start pre-paying for his expenses.

Q: What are some challenges and successes you have experienced at this early stage?

A: So far, things have worked out as expected. I’ve received a very positive response from individuals who we are trying to recruit for the pilot phase of this program. The SET Card has an ATM withdrawal feature, which really benefits the cardholders who will need to have access to some cash on their trips. In some of the cases with individuals traveling to certain third-world countries, they will need to use cash for a majority of their transactions. This card gives them the security to be able to take their card to their foreign location and withdraw money from an ATM there. The downside is the fees associated with withdrawing money from an ATM that doesn’t belong to our card issuer. Whenever possible, we are recommending withdrawing cash locally prior to the trip. Also, one challenge is that I have to notify the bank prior to every foreign transaction to make the necessary changes to the card. This adds a few more steps.

A question that was brought up was vendor acceptance of a card that doesn’t have the cardholder’s name on it. To address this, I will be issuing an authorization letter on our university letterhead to the cardholder when they pick up their card, tying in the card number to the individual on the trip. We are also directing cardholders to take their university ID and their driver’s license on their trip.

Learn More

Recharged Education will continue to see how the program at Missouri State University is going. Meanwhile, visit the webpage on Declining Balance Cards to gain insight from a couple other end-users.

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