Procurement, Payables and Commercial Card Strategies

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Procurement, Payables and Commercial Card Strategies Financial Services

Transcript of Procurement, Payables and Commercial Card Strategies

Page 1: Procurement, Payables and Commercial Card Strategies

Procurement, Payables and Commercial Card Strategies

Financial Services

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Arizona State University Panelist

• Lily Tram• Financial Services – Accounts Payable• Director Financial Services

• Patty Taylor• Procurement• Purchasing Technology Manager

Financial Services/Procurement

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ASU{5 campuses

Over 90,000 students enrolled

Graduated over 20,000 students

About 14,000 faculty/staff

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Accounts Payable and Purchasing:

Where do they fall under at ASU?

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ASU Structure

Financial Services/Procurement

 Dr. Morgan Olsen

Executive Vice President, Treasurer and Chief Financial Officer 

 Joanne Wamsley

Vice President for Finance and Deputy Treasurer

 John Riley

Associate Vice President University Business Services

 

 Marilyn Mulhollan

Assistant Vice PresidentFinancial Services

 

 Nichol Luoma

Chief Procurement Officer

 Accounts Payable

 Procurement

 

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Payments

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140,000 AP payments - $604.3M

4,300 wire payments - $506.8M

Over 55,000 AP checks issued

41,000 AP Vendors

FY 2015  Accounts Payable Highlights

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AP Card Payment:

Why use the AP Card Payment Process?

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AP card payment program can

•Reduce the number of printed AP checks

•Scrub the vendor table

•Vendor receives payment faster

•Financial Incentive

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Strategy:

How did we do it?

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• JPMC – AP Trac Program

• Upper management support of the program

• Identified vendors to seek program participation

• Created communication letters

• Piloted one vendor

• Full Implementation

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After Implementation:

What’s next?

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• How can we grow the program?

• RFP for AP Card Payment program

• ACH

• Single Use Card – secure format

• Reduced merchant fee program

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Commerce Bank {

Quick implementation

Supplier on-boarding

Single use virtual card

Easy to access

ASU policies incorporated

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One Accounts Payable Card Payment Program

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ASU moved to one AP Card Payment Program

Commerce Bank

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Some Challenges…

•Impact of Vendor merchant fees

•Large dollar payments

•Merchant fees passed to ASU

•Training and turnover of AP staff

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Reduced the number of checks issued

Vendors receive payments faster

Program volume of spend increased

Onboarding vendors monthly

Rebate

Efficiencies and Successes

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Travel Card Program

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US Bank Travel Card Program

•Implementation July 2015

•Company billed company paid card

•1,500 travel card issued

•Over 700 cards used

•Ghost card for airfare

•$2.6M in spend through September 2015

o

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Procurement, Payables and Commercial Card Strategies

Procurement

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Procurement

Methods {Standard Purchase Orders

eProcurement System

PCard

Limited Value Purchase Order

Request for check or Payment Voucher

Employee Reimbursement

Travel Card

Internal Purchase Orders

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Standard Purchase

Orders

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27,950 Transactions

$709M Purchase Orders Issued

FY 2015  Standard Purchase Order Highlights

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eProcurement System

Less than 5K

Consultants

Technology

FY 2015  Standard Purchase Order Goals

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eProcurement System

“SunRISE”

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36,606 Transactions

$17.5M Spend

FY 2015  eProcurement Highlights

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eProcurement:

Why use the eProcurement System?

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eProcurement program can:

•Reduce the number of orders routing to the buyer

•Less time for order distribution to the supplier

•Departments receive their product quicker

•cXML orders are not retyped

•Contract Repository

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Strategy:

How did we do it?

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SciQuest – eProcurement Program

•Gained support of upper management

•Contracted with the supplier

•Created an Advisory Board

•Started with Scientific community

•Full Implementation

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Challenges…

•Identifying Board Members

•PI’s didn’t want to inventory their labs

•Users didn’t want to use the system

TODAY, USERS ARE ASKING TO DO MORE IN THE e-PROCUREMENT SYSTEM!

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eProcurement Optimization Project:

What’s next?

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How can we optimize the program?

•Non-Catalog Ordering

•Forms

•Buyer routing

•Sourcing

•Contract Routing

ALL PROCUREMENT FUNCTIONALITY WITHIN ONE SYSTEM!

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Purchasing Card

(PCard) Program

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155,892 PCard Transactions

$67M Spend

FY 2015  PCard Highlights

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PCard:

Why PCard?

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Procurement Card (PCard) program benefits

•Users can place orders with greater ease

•Reduced Buyer workload

•Grant Account purchases vs other funding

•Rebate

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Strategy:

How is the Program Structured?

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Purchasing Card (PCard) Program

•Cardholders/PCard Managers/Allocators

•Cardholder limit – 5K

– Exceptions Granted

•Reconciliation Process

•1 PCard per university account

•Reconciliation ManualPCARD LANGUAGE IS WRITTEN INTO ALL CONTRACTS!!!

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Partnership

WORKING TOGETHER FOR OVERALL SUCCESS!

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43

Procurement , Payables Commercial Card Stratégies at the University of Washington

Aris GempesawManager of Accounts Payable and Card Services

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Who is the University of Washington

The UW is a multi-campus university in Seattle, Tacoma and Bothell, as well as a world-class academic medical center

We have 16 colleges and schools and offer 1,800 undergraduate courses each quarter.We confer more than 12,000 bachelor’s, master’s, doctoral and professional degrees annually.Ranks among the top schools in the country in providing U.S. Peace Corps volunteerReceives more federal research funding than any other American public university

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Our Organization

UW Bothell:

•4,605 students enrolled

•6 Schools offering more than 35 undergraduate, post-baccalaureate and graduate degrees

UW Tacoma:

•4,501 students enrolled

•6 Undergraduate Programs and 7 graduate programs

•Campus consists of 20 buildings on 46 acres with a total of 557,664 square feet of active campus space

UW Seattle:

•44,786 students enrolled

•11 Schools /Programs

•Offer 180 majors

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Our Medical Partnerships

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UW Financials- June 30, 2014 -

TOTAL REVENUES Assets $9,898,206Revenues $3,913,971

OPERATING EXPENSES Salaries $ 2,026,646Benefits $ 661,999Goods/Services $ 1,698,731

47

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Our Structure: Procurement Services

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PROCUREMENT SERVICES GOALS

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Our Strategic FrameworkRELEASE POTENTIALQUALITY DELIVERY

COST

TRANSFORM SERVICESAFETY MORALE

Reduce Cost/Increase Revenue

Eliminate Administrative Burden

Enhance Stakeholder Experience

Create Value for Customer

Provide Constancy

of Purpose

Organization & Resources Embrace Innovation

Assure

Quality at the

Source

Respect

Individuals

Lead with Humility

Implement 100% supplier scorecard with strategic contracted suppliers by January 2016

Meet Lean Assessment: Goal 100% by 2015

Migrate all transactions to electronic processes by January 2016 (PAS PO to Ariba)

Reduce cost to campus by 50% my moving PAS transactions into Ariba by Dec 2016

Idea watch: 2 implemented idea per employee per month

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SMALL DOLLAR TRANSACTION INITIATIVE

Starting in July 2009, “Small dollar” transactions routed through eProcurement or credit card (ProCurement Card) rather than legacy purchasing and accounting system.

Benefits:

More efficient & better visibility

Estimated Cost savings• $62/legacy system transaction• $20/credit card transaction• $18/eProcurement transaction

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BUYER INITIATED PAYMENT PROGRAM (BIP)

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PAPER CHECK REDUCTION

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PAYMENT TRANSITION

NUMBER OF CHECKS ISSUEDTRANSACTIONS PAID IN A TYPICAL MONTH

0

5

10

15

20

25

30

35

40

45

2009 2014

Thou

sand

s

ACH

ePayables

PCard

Checks

0

20,000

40,000

60,000

80,000

100,000

120,000

2009 2010 2011 2012 2013 2014 2015

# of Checks issued

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ProCard Structure• UW’s Card program started in 1999 with JP Morgan Chase as

our card provider

• WIPHE * contract with other WA Universities

• Types of card accounts:• Travel• Procurement Card (ProCard)

• Managed by 2 Full time staff + Administrator

* WASHINGTON INSTITUTIONS OF PUBLIC HIGHER EDUCATION(WIPHE)

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PROCARD

 $-

 $20,000,000

 $40,000,000

 $60,000,000

 $80,000,000

 $100,000,000

 $120,000,000

 $140,000,000

Jan '12-Dec '12

Jan '13-Dec '13

Jan '14-Dec '14

Jan '15-Dec '15

Annual Spend

Total Procard Accounts: • Individual Cards: 3,431• Ghost Cards : 227

PCARD 2010 2011 2012 2013 2014 YTD 2015

Transactions              265,991                 288,294                296,390               298,856            295,627                199,063 

Spend Volume  $     83,174,765   $     106,246,811   $     125,297,750   $   128,384,792   $ 129,180,849   $       84,964,434 

Growth 27% 28% 18% 2% 1% ?

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Travel Accounts

Total Travel Accounts: 2,810• Individual Cards: 2,299• Department Cards: 511

CTA 2010 2011 2012 2013 2014 2015 Forecast

Transactions                95,497                  91,965                  94,123                91,022              86,978                  87,967 

Spend Volume  $     25,560,586   $       26,100,818   $       27,054,740   $     28,306,253   $  18,213,841   $       27,358,239 

Growth 11% 2% 4% 5% -4% ?

 $-

 $5,000,000

 $10,000,000

 $15,000,000

 $20,000,000

 $25,000,000

 $30,000,000

Jan '12-Dec '12

Jan '13-Dec '13

Jan '14-Dec '14

Jan '15-Dec '15

Annual Spend

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Card spendUW CY2012 CY2013 CY2014 2015 Forecast

Transaction # 390,513 387,868 381,495 386,971Spend Volume 152,352,490$ 156,651,872$ 156,429,804$ 154,979,715$ YOY Growth 15% 3% 0% -1%

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Other Card Programs for Special Projects

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Procurement, Payables and Commercial Card Strategies

Sandy HicksAssociate Vice President & Chief Procurement Officer

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University of Colorado 61,258 students $3.55B budget $1.06B procurement spend $878M research funds 35,000 active Concur users 94,000 expense reports

valued at $105M March 2010 fully implemented Concur Expense May 2011 implemented Concur Travel August 2011 implemented SciQuest P2P

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Payables Organization / PSC

Payables staff assignments broken down by alphabet / system responsibility

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Process ImprovementInvoice Process < July 2011Receive all paper invoices via US mail and campus mail

o 650/dayo 3250/weeko 169,000/year

Manual handling / sortingA slow and labor-intensive processZero invoices received electronically

Invoice Process > July 2011July 2011 launched [email protected] – dedicated email in box Initial phase – printed, date stamped, sorted, delivered May 2012 began importing invoice images directly into CU MarketplaceInvoice images imported directly into folder of the responsible Payables SpecialistBy 2014, 80% of invoices are received electronically through APInvoice (Avg. 430/day)

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Efficiencies GainedProcess improvement benefits the University in multiple ways – Streamlined process increases speed of processing invoicesReduce transit time and risk of lost invoicesReduce postage and envelope costs for suppliersReduce personnel involved in process – one FTE Savings on required supplies – went from $350/month on copy paper to $175/monthReduce paper usage by 5 cases/monthShredding pick-ups reduced to once every two months; an annual savings of approx. $8,000.Departments able to view invoice images in the system

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Received CUSP Award

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Electronic Invoicing through CU Marketplace

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Procurement Card• Visa card issued by US Bank to purchase small dollar items up to

$5000• Training required to obtain card• Procurement Card Handbook• US Bank feeds card transactions into the University’s Expense

System Concur for reconciliation• Cardholder submits a monthly expense report for review/approval• Compliance Specialist reviews procurement card information in

Concur. Targeted review for specific purchases and general department reviews on a rotating schedule

• Violation points assessed for mis-use may result in card suspension

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Travel Card• Visa card issued by US Bank to facilitate payment of University

travel-related expenses, including groups and guests• University liability card• Training required to obtain card• Travel Card Handbook• US Bank feeds card transactions into the University’s Expense

System Concur for reconciliation• Cardholder submits one expense report per trip for review/approval• Reports route to Payable Services for final approval. Travel

Coordinator spot checks approved reports for policy mistakes• Automatic approval of Mileage & Parking reports at $500 and less • Ghost card used for airline tickets

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Payment Plus• US Bank credit card product used at payment stage of procure-to-

pay process • Cardless e-payments replace paper check processing• Single payment created for all invoices paid in the same day• File feed to US Bank instructs the bank to open credit limit (ghost

card) for the amount of the payment• Email remittance information sent to supplier; includes control # and

breakdown of invoices included - Supplier charges card for payment• CU team dedicated to sign-up suppliers for the program and

coordinate with US Bank• Supplier portal used to identify suppliers interested in the program• Favorable payment terms at N10

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Commercial Card Program

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Card Program Volume

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Commercial Card Revenue

• eProcurement licensing fees• 5 FTE for Procurement Systems • Spend Analytics Tools• Temporary Staffing Needs• Online booking fee for Concur Travel• Campus Events• Procurement Consulting Fees

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Questions