introduction to purchasing card principles. define what a purchasing card (p-card) is list the...
TRANSCRIPT
Introduction To Purchasing Card Principles
• Define what a Purchasing Card (P-card) is• List the benefits of using a P-Card• List the instances when you use a P-Card• List restrictions of using the P-Card• List your responsibilities regarding the P-Card• List the steps to follow when the products order are defective or
incorrect• List the people involved in the Purchasing Card Approval Process• List available Purchasing Card resources
At the end of this training session, you will be able to:
Objectives
What is a Purchasing Card (P-Card)?
• It is a Visa credit card with your name and GSW State University’s name embossed on the card
• The credit card is issued by Bank of America to purchase goods/items on behalf of GSW
• GSW is responsible for the payment of the goods/items you purchase on the credit card
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Your NameYour Entity’s Name
Bank of America
How it all works Behind the Scenes
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Transaction goes to vendor and into their
Merchant Bank
Payment is made with P-Card to vendor –
Buyer receives Receipt via email
Vendor creates Receipt of
purchase online
Pay on Order
Payment
Purchase is made with P-Card
Vendors that accept P-CardBank of AmericaBank of America email
AuditAudit SpendAnalysisSpendAnalysis
ProcurementProductivityProcurementProductivity
SupplierPerformanceSupplierPerformance
GSW – P-Card Administrator
What are the Benefits of Using a P-Card?
• Offer the opportunity to streamline the processes of procuring and paying for goods and services
• Reduces the administrative process costs• Reduces the volume of accounts payable transactions• Reduce costs associated with small dollar purchases
– Streamline purchasing and payment procedures– Reduce the administrative burden
• Simplifies and automates the purchasing and payment process• Reduces purchasing cycle time and expedites delivery• Provides management information• Allows reallocation of resources to more “mission critical” needs• Expands number of possible merchants• Increases competition• Typically, 80% of transactions only represent 20% of total dollars spent
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Consider the Benefits of the Purchasing Cards
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LE
GA
CY
PR
OC
ES
S
½ to 1 DAY 1 to 2 Days1 to 2 Days
7 Days 3 Days 1 Day
ManuallySearch Paper
Catalog
Fax, Phone,or In-HouseMail Paper
Requisitions
RequisitionInput
Fax, Phone,Traditional EDI
PurchaseOrders
SupplierOrder
Fulfillment
ReceiveProduct
Paper InvoiceMailed to AP
InvoiceMatched to
PO
In-House MailInvoice Holds
to InvoiceApprover
HoldResponseSent to AP
HoldResolved,
Invoice Paid
Printed CheckMailed toSupplier
1/2 to 1 Day
1/2 to 1 Day
1 to 2 Days
5 to 6 Days 1-2 Days 1 to 2 Days
Consider the Benefits of the Purchasing Cards
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LE
GA
CY
PR
OC
ES
S
½ to 1 DAY 1 to 2 Days1 to 2 Days
7 Days 3 Days 1 Day
Manually Search Paper
Catalog
Fax, Phone, or In-House Mail Paper
Requisitions
Requisition Input
Fax, Phone, Traditional EDI
Purchase Orders
Supplier Order
Fulfillment
Receive Product
Paper Invoice Mailed to AP
Invoice Matched to
PO
In-House Mail Invoice Holds
to Invoice Approver
Hold Response Sent to AP
Hold Resolved,
Invoice Paid
Printed Check Mailed to Supplier
1/2 to 1 Day
1/2 to 1 Day
1 to 2 Days
5 to 6 Days 1-2 Days 1 to 2 Days
X
X X X X
X
X
Consider the Benefits of Purchasing Cards
Purchasing Cards improve procurement cycle times
• According to the 2005 Purchasing Card Benchmark Survey*, the average procurement cycle is reduced by 6.3 days
• Suppliers are paid within 48-72 hours of a posted transaction• Employees receive goods/services faster
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9.26 days
Avg. cycle time with traditional
PO method
9.26 days
Avg. cycle time with traditional
PO method
6.3 days
Resulting cycle time reduction
with P-Card
6.3 days
Resulting cycle time reduction
with P-Card
2.96 daysAvg. cycle time of P-
Card transaction
2.96 daysAvg. cycle time of P-
Card transaction
Procurement cycle is reduced by 68%* (determination of employee need until the receipt of ordered goods
Procurement cycle is reduced by 68%* (determination of employee need until the receipt of ordered goods
*RPMG Research Group
= +
Consider the Benefits of Purchasing Cards
Cost breakdown of Traditional PO and P-Card Transactions*
PO Purchasing Card
9*RPMG Research Group
$31.30
$31.75
$26.16
$7.60
$5.71
$8.52
The total cost associated with payment for good and services (including receipt and matching of invoices, purchase orders,
receiving documents; approval workflow for payment, disbursement of funds; mailing/transmitting payment; post-purchase accounting for transactions; and reconciliation of
disbursement with bank records)
The total cost of the purchasing process (including activities to requisition a good, approve a purchase, and
generate and deliver a purchase order to supplier
The total cost of sourcing (including specification of requirements, supplier pre-selection, transmittal of requirements to suppliers, receipt and evaluation of
supplier quotations, supplier selection, and contracting
$89.21 $21.83
Consider the Benefits of Purchasing Cards
The elimination of process steps results in transaction cost savings
• According to the 2005 Purchasing Card Benchmark Survey*, the average cost of a traditional PO based process was reported by respondents to be about $90
• The average cost of a Purchasing Card transaction was estimated to be about $22
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$89.21Avg. cost of
traditional PO method
$89.21Avg. cost of
traditional PO method
$67.38Resulting cost
reduction with P-Card
$67.38Resulting cost
reduction with P-Card
$21.83
Avg. cost of P-Card transaction
$21.83
Avg. cost of P-Card transaction
A process cost reduction of $68,000+ for every 1000 transactions migrated to P-Card
A process cost reduction of $68,000+ for every 1000 transactions migrated to P-Card
*RPMG Research Group
= +
When Do You Use a P-Card?
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When you purchase a small-dollar supply item
When you pay for a minor repair
on office, warehouse, or lab equipment
When you purchase off a statewide or
agency contract that accepts the purchasing card
When you purchase a
small-dollar non-equipment item
(Less and equal to $100 with prior approval from IIT. The
approval form is available on the Business Forms page)
Where Can You Use a P-Card?
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Over the counter (point
of sale)
By fax
By telephone
Over the internet
Your department determines your
P-Card limits
Your monthly limit is based on expected P-Card
use
Some of the Restrictions
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You cannot use your card to pay for:
Travel, Entertainment
Authorized personnel with approved travel can purchase airline tickets and in-state SWC car rentals as well as
pre-approved athletic and team travel with the
P-Card
Motor Vehicle Fuel
Professional Services (doctors, lawyers)
Cash Advances
Some of the Restrictions
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Personal Purchases or Foundation Purchases
Food / Gift Cards Gift Cards are considered Cash
You cannot use your card to pay for:
Split Purchases
Purchasing same item, but paying in split payments
Things You Must Do Regarding Your P-Card…
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Contact P-Card Program Administrator/Coordinator if…
• Your name changed• Department Changed• Phone Number Changed
Employee Agreement
Sign an Employee Agreement Form
Keep your card in a secure location at
all times
Never share your card
What Rules Do You Follow?
Renew your P-Card every two years
Renew your P-Card every two years
Every 2 Years
Review and reconcile the Bank of America billing information within WORKS
Review and reconcile the Bank of America billing information within WORKS
Follow the established single transaction limit: less than $5,000
Follow the established single transaction limit: less than $5,000
$4,999.99
Notify P-Card Program Administrator/ Coordinator if you need to raise your limits or need an exception to established P-Card Policy
Notify P-Card Program Administrator/ Coordinator if you need to raise your limits or need an exception to established P-Card Policy
Things You Must Do Regarding Your P-Card…
• Ensure complete understanding of GSW’s reconciliation process
• Maintain a copy of all receipts• Review and maintain reconciliation documents• Follow the procedures regarding Cardholder approvals• Follow the established purchasing guidelines• Maintain adequate documentation (WHAT, WHY,
WHERE/location) • Tape ALL small receipts to an 8-1/2 x 11 sheet of paper• Summary Sheets due by the 10th of each month by 3
PM
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Things to Watch For…
Make sure that Sales Tax is not charged on your purchases
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Sales Tax
What happens if you realize you were charged for Sales Tax:a. Contact the vendor immediately and document your actionsb. Have the Vendor issue a credit for the sales tax amountc. If the Vendor refuses or is unable to refund the sales tax,
document their response and keep with your receipts. The Tax and Use Form is available on the Business Forms page
When Is Your P-Card Suspended?
• you do not follow the State’s and GSW’s policy and procedures
• you do not complete your reconciliation process in a timely manner (due by the 10th of each month by 3 PM)
• of habitual misuse• of fraudulent activity. When this is
the case, you will be terminated and prosecuted
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Your P-Card can be suspended because…
When Do You Cancel Your P-Card?
• you are leaving employment
• you are taking extended leave from your job
Your can cancel your P-Card when…
What Happens When the Product is Broken or You Did not Order It?
• Contact the vendor immediately and document your actions
• If you are unhappy with the vendor’s response, contact your Purchasing Card Program Coordinator to initiate a Dispute
• If you do not recognize a charge, contact the vendor for a proof of purchase or delivery
• If you suspect fraudulent activity – contact your Purchasing Card Program Coordinator immediately for further instructions
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Who is in the Chain of Command?
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Entity Cardholder
Entity’s Purchasing Card Program Administrator (APO or CUPO)
Statewide Purchasing Card Program Manager
Entity Reviewer/Approver
Entity’s Purchasing Card Program Coordinator
Entity Accountant
P-Card Program Resources
To review GSW’s Purchasing Card Policy, go to the Business Forms page and click on Procurement Card Policy
To review Georgia State Purchasing Card Policy and on-line resources:
http://statepurchasing.doas.ga.gov/00/channel_title/0,2094,35226973_36298628,00.html
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P-Card Program Resources
• To review WORKS Payment Manager on-line training materials:
https://payment2.works.com/wpm/bookmark
To contact P-Card Administrator: [email protected] contact P-Card Coordinator: [email protected]
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Questions?
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