powerful purchase card programs for schools
DESCRIPTION
Are your teachers still using their personal credit cards to purchase supplies at your independent school? Do away with the delayed reimbursement and cumbersome reconciliation process by starting a purchase card program. Purchase Card programs are specifically designed for organizations that have 10 or more cardholders, with specific limits and needs for each card or group of cards. Use this presentation to get an inside look at how you can implement a successful purchase card program at your school. Though there are many programs available, Diamond Mind's Purchase Card program is completely free for schools.TRANSCRIPT
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POWERFUL PURCHASE CARD PROGRAMS FOR
SCHOOLSPresented by:
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Diamond Mind is the leading expert on payment technology and solutions to over 800 independent schools.
We are devoted solely to schools, established in 2003.
Our purchase card program was designed specifically for K-12 in 2007 and has been continuously evolving.
250 schools across the U.S. use the Diamond Mind purchase card.
Currently a combined credit line of $200M available to our client schools and $45M being spent annually.
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How are they different from other types of credit cards?
Why should a school use a purchase card?
What types of purchases can it be used for?
Tips for successfully implementing a program
Part 1
Part 2
Understanding
Implementing
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UNDERSTANDING PURCHASE CARDS
Part 1
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WHAT IS A
PURCHASE CARD?
An efficient and flexible form of credit card that is paid off each month and allows for better control, limits, and
visibility than other types of credit cards.
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PERSONAL SMALL BUSINESSPURCHASE
CARD
Typical Number of Cards 1-2 Cards 1-5 Cards 10+ Cards
Accrues Interest/ Carries Balance Most Yes/Some No Most Yes/Some No No
Card ControlsBank Controlled,
Few Admin Options
Mostly Bank Controlled, Few Admin Options
Primarily School Admin Controlled,
More Admin Options
Guarantee Type Personal Combined Personal and School School
Fee Per Cards $0 - 450 $0 - 450 $0 - 75
RewardsUnlimited/capped
cash back or rewards
Unlimited /capped cash back or
rewards
Unlimited cash back
HOW IS IT DIFFERENT FROM
OTHER
TYPES OF CREDIT CARDS?
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Purchase cards offer
Better cost controls
Reduced administrative
time
Encourage cost
reductions
WHY SHOULD A SCHOOL
USE A PURCHASE CARD?
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Can save between 55% and 80% of traditional
processing costs* (roughly $74/transaction!)
Save an average of 8 days from the paper procurement cycle time of 12 days
Benefits of a purchase card program
Customize purchasing parameters (ie. transactions limits)PAYMENT CONTROLS
View invoices and control spending limits
Code transaction information for transfer into school accounting system
ONLINE MANAGEMENT TOOLS
REDUCED TIME
REDUCED PAPERWORKResponsibility for 1099 filings are managed by processor, not your school
* 2012 Purchasing Card Benchmark Survey Results by RPMG Research
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Common Uses of a Purchase Card in Schools
• Travel (school trips, etc.)
• Computer Equipment
• Utilities and Grounds
• Renovation and Construction
• Teacher/Faculty Supplies
• Legal and Accounting Services
• Furniture
• Fuel
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Uncommon Uses of a Purchase Card in Schools
• Wig and Toupee Shops
• Automobile and Truck Dealers
• Dairy Product Stores
• Duty Free Stores
• Tax Payments
• Debt and Personal Counseling
• Towing Services
• Video Game Arcades
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WHAT IS A
PURCHASE CARD?
It’s an efficient and flexible form
of credit card that is paid off each month and allows for
better control , limits, and visibility
than other types of credit cards.
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TIPSFOR SUCCESSFULLY IMPLEMENTING A PURCHASE CARD PROGRAM
Part 2
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Elements of a Powerful Purchase Card Program
1Plan Ahead
2Empower
Employees
3Control
Regularly
4Eliminate Paperwork
5Transfer Data
6Expand Usage
7Maximize Monetary Benefits
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Plan Ahead
Estimate your highest spend in a given period
Think of major purchases, travel, group trips, and upcoming events
Double that amount (think long-term growth!)
Your financials should support what you ask for
Ensure Your Credit Limit is Sufficient
1
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Plan Ahead
Define roles and responsibilities for program management
Prepare internal policies and forms
• Create cardholder agreement
• Create card checkout forms when applicable
• Ask your program provider for best practices
Develop Internal Policies and Procedures to Manage Program
1
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Plan Ahead
Excite about the benefits
Gain card holder or department head
buy-in
Educate on the process
Share the success stories a year later
Communicate with Stakeholders and Employees
1
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Replace the need to use personal credit cards, checks, and petty cash
Take advantage of automatic currency conversion on foreign trips
Place ownership on cardholders for spending and reporting
Empower Employees
Issue individual cards to everyone who needs to make purchases or incur expenses
2
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To group expenses by event or category (fuel, travel, maintenance, etc.)
To enable temps or volunteers (book fair, auctions, etc.)
Create controls and log of card usage
Empower Employees
Use department cards where appropriate
2
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Utilize your system to make your job easier!
Empower Employees
Train your staff on online expense tracking and expense management
2
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Align credit limits with each employee’s needs
Vary credit limits over time as needed
Get the most out of available restrictions, (e.g., max transaction amount, limited acceptance, foreign transactions)
Daily reporting and real-time transaction information
Control Regularly
Manage controls for each card
3
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Group cards into departments
Delegate responsibilities to department heads
Control Regularly
Group Cards as Needed
3
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Lists every item purchased in an order
Contains all Level II data: purchase order number, customer number, description, additional details, etc.
Control Regularly
Get further insight into purchases through Level III data
3
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Move it online
Use multi-tier approval process if necessary
Eliminate Paperwork
Simplify expense tracking, reporting, and approval
4
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Upload Receipts
Eliminate Paperwork
Minimize Paper Receipts
4
Responsibility to issue 1099-MISC is transferred to the banks and processors of the business who accepts the card
Skip filing 1099-MISC
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Auto-assignment or entered one-by-one
By employees or business office
Approver control on accounting code assignments
Transfer Into Accounting System5
Pre-assign transactions to your account codes
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Transactions exportable in various formats
Transfer Into Accounting System5
Transfer all transactions into your financial system
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Provide transaction details
Level III data available
Reduce work for business officer
Transfer Into Accounting System5
Make your auditors happy!
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Make it a default payment option
Review the list of most common credit card acceptors used by independent schools at www.diamondmindinc.com/acceptors
Run a match of your frequently used vendors against lists provided by card associations
Expand Usage6
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Get cash back
Maximize cash back with more frequent or faster payments
Watch for promotional categories
Automate invoice payments
Pay electronically
Get the most with auto-debit
Benefit from predictable cash flow
Insight into where you are spending and paying bills
7 Maximize Monetary Benefits7
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Powerful Purchase Card Program Elements Recap
1Plan Ahead
2Empower
Employees
3Control
Regularly
4Eliminate Paperwork
5Transfer Data
6Expand Usage
7Maximize Monetary Benefits
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Case Study – DM Client School in Wilton, NH
Number of Students: 108
Staff Members: 49
Grades: 9 – 12
Annual Revenue: $4 Million
New finance manager arrived in 2010
Overview
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Case Study - DM Client School in Wilton, NH
Business manager surprised by current process
• Several employees frequently used personal credit cards to make purchases for school
• Wasn’t sure if employees had any spending or transaction limits
• No official system to enforce the limits that did exist
Only able to reimburse employees once a month
Challenging to stick to a campus-wide budget and limit spending with such a system
School needed to track and limit spending
• Tried bank card program, loved the security, but still did not have enough controls or accounting system compatibility
The Problem
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Case Study - DM Client School in Wilton, NH
She was referred to Diamond Mind by a peer school because she was particularly interested in a service provider who specialized exclusively in independent schools
With the Diamond Mind MasterCard, they could set spending limits and restrict purchases to specific categories
She also could send spending notifications and alerts, as well as manage all of these options online
Data could also easily be transferred into her QuickBooks accounting system. We even customized her desired data export format.
They would enjoy all these added benefits and count on the security of the MasterCard brand
The Solution
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Case Study - DM Client School in Wilton, NH
School has 20 Diamond Mind Purchase Cards for employees
$30K available credit line per month
Today, the business manager has a clear picture going into each month of who is spending and what items are being purchased.
Because she is using a Purchase Card program, she can reconcile quickly and easily each month and has control over employee spending.
The Outcome
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THANK YOU!www.diamondmindinc.com