p-cards a local perspective · utili putilize p-cd fi icards as a means of invoice consolidation...

PP Cards Cards PP--Cards Cards a local perspectivea local perspectivea local perspectivea local perspective

P-Card Program Objectives ImproveImprove the efficiency of high volume, low dollar

amount purchases, while reducingreducing transactionamount purchases, while reducingreducing transaction costs and maintainingmaintaining integrity in and control of the purchasing process

Supports the Procurement Division’s mission of providing City Stakeholders with a procurementproviding City Stakeholders with a procurement system that is fair, simple, transparent, cost effective and ensures the maximum value for each public dollar spent

ImproveImprove

Pareto Principle Pareto Principle adapted to procurement /supply management to

suggest that on average, 80%80% of transactions account for only 20%20% of spend

P C d t li th i iti b P-Cards streamline the acquisition process by issuing one check to the credit card company instead of multiple checks to a supplierinstead of multiple checks to a supplier realizing a significant savings in transaction

costs and personnel resourcescosts and personnel resources

ImproveImprove The Critical Few and Trivial Many 69% of 10 500 invoices processed in 2012 69% of 10,500 invoices processed in 2012

included $500 or less spend 7,300 small dollar invoices processed worth , p

~$740,000 (avg. $101 /invoice) 3,200 remaining invoices processed worth

~$73,300,000 (avg. $22,665 /invoice)

ImproveImprove

Utili P C d f I i Utilize P-Cards as a means of Invoice ConsolidationRecently Closed Home Depot & GFS Accounts Recently Closed Home Depot & GFS Accounts all future transactions moved to P-Card annual P-Card spend anticipated to increase by annual P-Card spend anticipated to increase by

~$24,000 Increases rebates

$ annual transaction cost savings: ~$25,000

More ways to ImproveImprove Greater P-Card utilization allows resources to be

better aligned with spend; redirecting staff timebetter aligned with spend; redirecting staff time from the Trivial Many (7,300 invoices at $101ea.) (7,300 invoices at $101ea.) to the Critical Few (3,200 invoices at $22,625 ea.)(3,200 invoices at $22,625 ea.)

improve accounts payable process by allowing staff more time to review and analyze large dollar paymentspayments

improve the procurement process by allowing staff more time to negotiate terms and develop contracts corresponding to spend 87% of the City’s 2012 spend was with 50 suppliers

ReduceReduce Transaction Costs

Simplifies review authorization and Simplifies review, authorization, and payment processes;Expedites acquisition and delivery of Expedites acquisition and delivery of goods;L k Less paperwork;

Expands options of suppliers and merchants


Typical Purchase Order Transaction Typical Purchase Order Transaction


Typical P-Card Transaction Typical P Card Transaction


ssavings per transactionavings per transactiong pg p Average cost to process a traditional PO is $93* Average cost of a P-Card transaction is $22* Average savings across all industry types is $71* Average procurement cycle time savings is 10 days*

*2010 RPMG Purchasing Card Benchmark Survey

ReduceReduce Transaction Costs WeSave program introduced at the end of 2012

P-Card performance one of several metrics tracked P Card performance one of several metrics tracked monthly

$105,000 in admin. savings since December, 2012

MaintainingMaintaining Integrity and Control The P-Card program is NOT intended to avoid or bypass

appropriate purchasing procedures; rather, the program offers cardholders an additional technique to usecardholders an additional technique to use

Preferred method of purchasing goods that cost $500 or less

The P-Card program can be used for in-store purchases as well as for mail, on-line, or fax orders

E h l i ibl f th it d t ti Each employee is responsible for the security and transaction on his/her P-Card. Only the cardholder can sign for purchases made on their card

THE P-CARD IS NOT TO BE USED FOR PERSONAL USE UNDER ANY CIRCUMSTANCES!

MaintainingMaintaining Integrity and Control

Department Director requests P-Cards for staff

Commercial Card Classic Cardholder Account Applications are completed, signed, approved by the City Manager and submitted to JPMorgan Chase by the P-Card AdministratorJPMorgan Chase by the P Card Administrator

All applicants must attend P-Card training

To accept the P-Card, applicants must carefully read and sign their Cardholder Agreement

Applicants obtain their P Card upon completion of their training Applicants obtain their P-Card upon completion of their training


P-Card Controls and Limits P Card Controls and Limits Spending limits established for cardholders include:

Single transaction purchase limit;M hl di li i Monthly credit limit;

Daily and monthly number of transaction limits Certain uses are restricted:

Travel; ATM/cash advances and other cash-related activities Staff Acknowledgements / Retirement Gifts Staff Acknowledgements / Retirement Gifts


Receipt Documentation Receipt Documentation Cardholders are required to maintain receipts for P-Card

transactionsC dh ld i d t i th i i t i t b itti Cardholders are required to sign their receipts prior to submitting them for payment

Receipt documentation should include: Vendor name Purchase amount Description of the item(s) purchased p ( ) p Date of purchase

MaintainingMaintaining Integrity and Control Each cardholder is responsible for providing signed receipts to their Dept.

Representative by the end of the day (or the following day) in which a charge is made on a P-Card.charge is made on a P Card.• If a purchase is made by e-mail or fax, provide a signed copy of the e-

mail or fax verification as a receipt;• For phone orders, provide a written and signed description of the p p g p

item(s) ordered within 1 day, followed by the signed receipt (packing list) enclosed with the item, when received.

As with all expenditures, all City departments and divisions areresponsible for remaining within their annual appropriation limits.

Cardholders must obtain the City Manager ‘s written approval prior to making any P-Card purchases for:

UNIFORMS UNIFORMS PROMOTIONAL ITEMS TECHNOLOGY RELATED ITEMS FOOD


Weekly review maintains integrity in and control y g yof the purchasing process

MaintainingMaintaining Integrity and Control The City of Westerville is a municipal corporation and

is, therefore, not subject to state and local sales or use taxtax.

Sales tax should NOT be paid on any MasterCard™ P-Card purchaseP-Card purchase.

The second line of embossing on the card’s front contains the City ofWesterville’s federal tax identification number, and indicates to the supplier that purchases made on the City’s behalf are tax-exempt.pp p y p

In Summary P-Cards are the preferred method of

purchasing goods that cost $500 or lesspurchasing goods that cost $500 or less ImproveImprove the efficiency of high volume, low

dollar amount purchasesdollar amount purchases Allows resources to be re-directed to critical tasks

Reduce Reduce transaction time and costs Average procurement cycle time savings is 10 days Average savings across all industry types is $71

MaintainMaintain integrity in and control of thepurchasing process

Questions?Questions?

Tom Patterson, CPPBProcurement CoordinatorCit f W t illCity of Westerville

Tel: (614) 901-6869 Fax: (614) 901-6401

[email protected]@ g

p-cards a local perspective · utili putilize p-cd fi icards as a means of invoice consolidation...

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