P-Card program management tools

December 20, 2017 Lynn Larson

Got money left in your budget? Instead of buying more office supplies that your organization does not need, get two valuable P-Card program management tools: a guide on revitalizing program policies and procedures, and a customizable risk assessment template. A single electronic copy of each totals a mere $119.98. Visit the store at: https://www.recharged-education.com/store/. Need convincing? Following is more information and a sneak peek of both resources.

If you work for a provider organization and want to obtain these resources to give to clients, there is a license option you can purchase for unlimited distribution.

Revitalizing Your P-Card P&P

With 20+ pages of content, the guide ($29.99) includes:

a list of topics to include
tips for your P-Card Intranet home page
procedure writing best practices
examples of procedure formats
sample survey to obtain users’ feedback
sample text you can customize
checklists to evaluate key sections
guidance on content development

Sneak Peek of Procedure Writing Advice

Design matters. I have seen too many P&P manuals comprised of large, unappealing text-heavy paragraphs. To give them new life, the guide recommends separating general information from procedures and making procedures more prominent. Courtesy of a 2016 blog post, here are “before” and “after” examples.

Before a revitalization effort, the steps are buried in the text block and the passive voice adds to the dullness.

The revised version reflects a script format to separate the tasks by job role. Each action begins with a verb and speaks to the person responsible.

Assessing Your P-Card Program Risk

The Excel template ($89.99) includes nine worksheets for a program manager to complete, based on these topics:

Program Overview
Policies and Procedures
Card Issuance
Card Controls
Card Usage and Activity
Card Cancellation
Accounting Processes
Information Security
Program Administrator/Manager

In all, there are more than 100 questions, providing a robust evaluation of P-Card controls.

Sneak Peek of Program Overview Information

To begin a P-Card risk assessment, document general facts about the program, such as:

date of the last risk assessment
program changes since then
year of program implementation
department responsible for program management
current card issuer
current number of cardholders/accounts
targeted dollar threshold for P-Card purchases
program metrics and benefits (to highlight the value of P-Cards)
information about internal card fraud cases (to put fraud into perspective)

This helps everyone who might review the assessment become more familiar with the program.

Please visit the store to see more and make a purchase: https://www.recharged-education.com/store/.

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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Inactive cardholders can hinder your game plan.

December 13, 2017 Lynn Larson

Got idle cardholders? There is a risk to having unused cards laying around who knows where. In addition, if your rebate incentives are impacted by average net spend per card, inactive and under-utilized cards will drag your program down. Reviewing and addressing inactive cardholders at least annually is a best practice that contributes to optimal program health. However, there are also things you can build into your program design to ward off issues in advance. Following are suggestions for both pieces.

Program Design Elements

Determine your stance on “backup” cardholders. Does each department really need one or more cardholders on standby? If a backup is called upon to use their card, they will actually remember the card program policies and procedures? Instead of having backups throughout your organization, could a designated department like purchasing or AP fulfill a backup role?

Define within your policies and procedures what “inactive” means; for example, a P-Card without transactions for nine consecutive months or fewer than three transactions during the fiscal year.

Add a stipulation to your internal agreement that your organization reserves the right to close inactive cards.

Ensure the card program manager/administrator (PM/PA) receives notifications from HR about employee status changes that could warrant closing their card account. This will assist your proactive efforts in managing cardholders.

Document the process the PM/PA should follow as part of the annual review (see next section for suggestions). For the sake of consistency, you could even prepare a template to use when contacting inactive cardholders. Also decide if a department manager can overrule any recommendations to close an inactive account.

Take steps to help make all cardholders active. (Photo by Mpho Mojapelo on Unsplash) — Take steps to help make all cardholders active. (Photo by Mpho Mojapelo on Unsplash)

The Annual Review

Do not automatically close inactive accounts. First figure out what is going on and then take appropriate action; following is a suggested process.

Generate a report, by department or by manager, of cardholder activity.
Identify the cardholders who meet your criteria for “inactive.”
Review the department overall to see if their card performance meets predefined goals or expectations.
Contact the cardholder and/or manager to further research why the cardholder is inactive. Does their role involve making purchases or paying bills?
Make a determination about how to address the inactive cardholder(s). If their department is performing well as a result of other cardholders, then the inactive card account might not be needed. If the department is under-performing from a card perspective, then take a more holistic approach. Do their cards need higher limits to accommodate their purchasing needs? Would additional training be of benefit?
Retain documentation related to the decision.

See 15 other annual tasks for card program fitness.

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Virtual Card reconciliation hurdles

December 6, 2017 Lynn Larson

Paid in full? In a perfect world, suppliers would process Virtual Card transactions within a day or two of receiving the payment notification, thus simplifying your accounts payable operations. In reality, some Virtual Card payment processes get stuck midway; that is, the supplier is slow to act or, worse, does not act at all. Sometimes this aspect is why AP may be lukewarm to Virtual Cards. Given the potential snags, how should your organization treat Virtual Card payments from an accounting perspective? While every organization is unique and may take different approaches, following are suggestions plus tips for easing potential frustrations.

For an overview of Virtual Cards (pull payments) versus buyer-initiated payments (push payments), click here.

Accounting Entries

Again, every organization might be a little different, but the following types of entries could occur:

Upon receipt of goods (e.g., debit an asset account and credit accounts payable)
Following invoice processing, when AP initiates the related Virtual Card payment through its electronic accounts payable (EAP) provider (e.g., debit accounts payable and credit a designated Virtual or Commercial Card payable account to keep these payments separate from other payment types)
When AP pays the EAP provider (e.g., debit the designated payable account and credit cash)

Reconciliation

Chances are, the statement total from the EAP provider does not exactly match the amount in the associated payable account because you are still waiting for one or more suppliers to process Virtual Card transactions. The key is to streamline your reconciliation process. Pay the EAP provider and then focus on the remaining amount in the payable account.

Which pending Virtual Card transaction(s) does the remaining amount represent?
Which pending transactions are associated with Virtual Cards that have expired while waiting for the supplier to act?
What does your EAP provider offer in terms of reporting to help you easily identify pending transactions (Virtual Card payments you have initiated but suppliers have not acted on), including any expired cards?
If needed, does your ERP system offer any reporting to simplify the reconciliation?

To maximize Virtual Card payments, plan ahead for how to prevent and address potential hurdles.

Additional Virtual Card Tips

As you add suppliers to your Virtual Card program, include relevant training.

Work with suppliers to identify who within their organizations will need training.
Train the applicable supplier personnel on the Virtual Card process. See a related blog post on Virtual Card acceptance.
Provide documented instructions for their ongoing reference.

Within your organization:

Determine your Virtual Card expiration date strategy.
Decide if you want to send reminders to suppliers before a Virtual Card expires.
Document procedures for how AP should address Virtual Card payments that suppliers do not process in timely manner. Besides training and communications with suppliers, this might involve extending the card expiration date if possible or reissuing a Virtual Card. While you do not want to wade into the waters of unclaimed property, try to avoid defaulting back to a check payment for the offending supplier, which can derail your Virtual Card program.

Access more content on ePayables/Virtual Cards.

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