Financial Services
Procurement,
Payables and
Commercial Card
Strategies
Arizona State University
Panelist
• Lily Tram
• Financial Services – Accounts Payable
• Director Financial Services
• Patty Taylor
• Procurement
• Purchasing Technology Manager
Financial Services/Procurement
5 campuses
ASU
Over 90,000 students
enrolled
Graduated over 20,000
students
About 14,000 faculty/staff
Accounts Payable
and Purchasing:
Where do they fall
under at ASU?
ASU Structure
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 President
Financial Services
Nichol Luoma
Chief Procurement Officer
Accounts Payable
Procurement
Financial Services/Procurement
Payments
FY 2015 Accounts Payable Highlights
140,000 AP payments - $604.3M
4,300 wire payments - $506.8M
Over 55,000 AP checks issued
41,000 AP Vendors
AP Card Payment:
Why use the AP
Card Payment
Process?
AP card payment program can
• Reduce the number of printed AP checks
• Scrub the vendor table
• Vendor receives payment faster
• Financial Incentive
Strategy:
How did we do it?
• JPMC – AP Trac Program
• Upper management support of the program
• Identified vendors to seek program participation
• Created communication letters
• Piloted one vendor
• Full Implementation
After
Implementation:
What’s next?
• How can we grow the program?
• RFP for AP Card Payment program
• ACH
• Single Use Card – secure format
• Reduced merchant fee program
Quick implementation
Supplier on-boarding
Commerce
Bank
Single use virtual card
Easy to access
ASU policies incorporated
One Accounts
Payable Card
Payment Program
ASU moved to one AP
Card Payment Program
Commerce Bank
Some Challenges…
• Impact of Vendor merchant fees
• Large dollar payments
• Merchant fees passed to ASU
• Training and turnover of AP staff
Efficiencies and Successes
Reduced the number of checks issued
Vendors receive payments faster
Program volume of spend increased
Onboarding vendors monthly
Rebate
Travel Card Program
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
Procurement
Procurement,
Payables and
Commercial Card
Strategies
Standard Purchase Orders
eProcurement System
PCard
Procurement
Limited Value Purchase Order
Methods
Request for check or Payment
Voucher
Employee Reimbursement
Travel Card
Internal Purchase Orders
Standard
Purchase
Orders
FY 2015 Standard Purchase Order Highlights
27,950 Transactions
$709M Purchase Orders Issued
FY 2015 Standard Purchase Order Goals
eProcurement System
Less than 5K
Consultants
Technology
eProcurement
System
“SunRISE”
FY 2015 eProcurement Highlights
36,606 Transactions
$17.5M Spend
eProcurement:
Why use the
eProcurement
System?
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
Strategy:
How did we do it?
SciQuest – eProcurement Program
• Gained support of upper management
• Contracted with the supplier
• Created an Advisory Board
• Started with Scientific community
• Full Implementation
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!
eProcurement
Optimization
Project:
What’s next?
How can we optimize the program?
• Non-Catalog Ordering
• Forms
• Buyer routing
• Sourcing
• Contract Routing
ALL PROCUREMENT FUNCTIONALITY WITHIN ONE SYSTEM!
Purchasing
Card
(PCard)
Program
FY 2015 PCard Highlights
155,892 PCard Transactions
$67M Spend
PCard:
Why PCard?
Procurement Card (PCard) program benefits
• Users can place orders with greater ease
• Reduced Buyer workload
• Grant Account purchases vs other funding
• Rebate
Strategy:
How is the Program
Structured?
Purchasing Card (PCard) Program
• Cardholders/PCard Managers/Allocators
• Cardholder limit – 5K
– Exceptions Granted
• Reconciliation Process
• 1 PCard per university account
• Reconciliation Manual
PCARD LANGUAGE IS WRITTEN INTO ALL CONTRACTS!!!
Partnership
WORKING TOGETHER FOR OVERALL SUCCESS!
Procurement , Payables Commercial Card Stratégies
at the University of Washington
Aris Gempesaw
Manager of Accounts Payable and Card Services
43
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 volunteer
Receives more federal research funding than
any other American public university
Our Organization
UW Bothell:
UW Tacoma:
UW Seattle:
•
4,605 students enrolled
•
4,501 students enrolled
•
44,786 students enrolled
•
6 Schools offering more
than 35 undergraduate,
post-baccalaureate and
graduate degrees
•
6 Undergraduate Programs and 7
graduate programs
•
11 Schools /Programs
•
Offer 180 majors
•
Campus consists of 20 buildings on
46 acres with a total of 557,664
square feet of active campus space
Our Medical Partnerships
UW Financials
- June 30, 2014 -
TOTAL REVENUES
Assets
$9,898,206
Revenues
$3,913,971
OPERATING EXPENSES
Salaries
$ 2,026,646
Benefits
$
Goods/Services
$ 1,698,731
661,999
47
Our Structure: Procurement Services
Executive
Director
Admin / HR
Major
Projects
Communications
Policy, BDP,
Sustainability
Director,
Procurement
Operations
Director,
Procurement
IT
Accounts
Payable
eProcuremen
t
Projects and
Sourcing
Procurement
IT
Purchasing
and Contracts
Customer
Service
Learning
Specialists
PROCUREMENT SERVICES GOALS
Reduced
prices through
use of master
agreements
Increased
efficiency
through
automation
Overall
increase in
customer
satisfaction
Our Strategic Framework
RELEASE POTENTIAL
QUALITY
Create
Value for
Customer
Enhance Stakeholder
Experience

DELIVERY

COST
Eliminate Administrative
Burden
Reduce Cost/Increase
Revenue
Provide
Constancy
of Purpose
TRANSFORM SERVICE
SAFETY
Assure
Quality
at the
Source
Organization & Resources
Implement 100% supplier scorecard
with strategic contracted suppliers
by January 2016
Meet Lean Assessment: Goal 100%
by 2015

MORALE
Lead with
Humility
Migrate all transactions to
electronic processes by
January 2016 (PAS PO to
Ariba)
Embrace Innovation
Respect
Individu
als
Reduce cost to campus by 50% my
moving PAS transactions into Ariba
by Dec 2016
Idea watch: 2 implemented idea per
employee per month
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
BUYER INITIATED PAYMENT PROGRAM (BIP)
Payment
Card
•
•
•
•
•
Over 5,000 payments per month
3,695 cards activated
Over 3,000 suppliers paid
Approximately $10M per month
5,000 checks avoided
ACH
Payments
• Over 9,000 payments per month
• Over 8,000 suppliers enrolled
• Over 9,000 checks avoided
Float
Savings
• Over $200k in float savings since
implementation
PAPER CHECK REDUCTION
Dollars Saved - Transitioning Payments from Checks
100
90
80
Thousands
70
$57
60
50
$36
40
$28
30
20
10
-
$13
$9
0
2009
2010
2011
2012
Check Cost : $2 per check
$ Savings
Checks Issued
2013
2014
PAYMENT TRANSITION
TRANSACTIONS PAID
IN A TYPICAL MONTH
NUMBER OF CHECKS ISSUED
120,000
Thousands
45
100,000
80,000
60,000
40
35
ACH
30
ePayables
25
40,000
20
20,000
15
PCard
Checks
10
0
2009 2010 2011 2012 2013 2014 2015
# of Checks issued
5
0
2009
2014
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)
PROCARD
PCARD
2010
Transactions
Spend Volume
Growth
2011
265,991
$
83,174,765
2012
288,294
$
106,246,811
27%
28%
2013
296,390
$
298,856
125,297,750
$ 128,384,792
18%
2014
YTD 2015
295,627
199,063
$ 129,180,849
2%
$
84,964,434
1%
?
Annual Spend
Total Procard Accounts:
• Individual Cards: 3,431
• Ghost Cards : 227
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$Jan '12Dec '12
Jan '13Dec '13
Jan '14Dec '14
Jan '15Dec '15
Travel Accounts
CTA
2010
Transactions
Spend Volume
Growth
2011
95,497
$
25,560,586
2012
91,965
$
11%
26,100,818
2%
2013
94,123
$
2014
91,022
27,054,740
$
4%
2015 Forecast
86,978
28,306,253
$ 18,213,841
5%
-4%
87,967
$
27,358,239
?
Annual Spend
$30,000,000
Total Travel Accounts: 2,810
• Individual Cards:
• Department Cards:
$25,000,000
$20,000,000
2,299
511
$15,000,000
$10,000,000
$5,000,000
$Jan '12Dec '12
Jan '13Dec '13
Jan '14Dec '14
Jan '15Dec '15
Card spend
UW
Transaction #
Spend Volume
YOY Growth
CY2012
CY2013
CY2014
2015 Forecast
390,513
387,868
381,495
386,971
$ 152,352,490 $ 156,651,872 $ 156,429,804 $ 154,979,715
15%
3%
0%
-1%
COMBINED CARD SPEND
160
140
Millions
23
23
125
128
129
26
120
100
27
26
80
106
60
40
83
20
2010
2011
2012
PCard
2013
CTA
2014
Other Card Programs for Special Projects
Tango Card
(www.tangocard.com)
• What are they:
Gift cards for payment to research subjects
• Details of the card:
• Subjects can purchase gift cards from select vendors on their website
• All vendors listed do no charge fees and that cards never expire
• Promo codes can be emailed
• This is helpful for online surveys; email promo codes to those who respond
Visa Cash Card
• What are they:
• Non-reloadable, anonymous, prepaid VISA card; no cash access, point of sale transactions only
Procurement, Payables and
Commercial Card Strategies
Sandy Hicks
Associate Vice President & Chief Procurement Officer
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
Payables Organization / PSC
Assoc. VP & Chief
Procurement
Officer
Director of
Payment
Services & Travel
Travel Manager
Commercial Card
Program
Specialist
Travel
Coordinator
Commercial Card
Program
Assistant
Payables staff assignments
broken down by alphabet / system
responsibility
Payable Services
Manager
Sr. Payable
Specialist
Team Lead
Team Lead
Payable Staff of 4
Payable Staff of 4
Process Improvement
Invoice Process < July 2011
Invoice Process > July 2011
 Receive all paper invoices via US
mail and campus mail
o 650/day
o 3250/week
o 169,000/year
 Manual handling / sorting
 A slow and labor-intensive
process
 Zero invoices received
electronically
 July 2011 launched
APInvoice@cu.edu – dedicated
email in box
 Initial phase – printed, date
stamped, sorted, delivered
 May 2012 began importing invoice
images directly into CU
Marketplace
 Invoice images imported directly
into folder of the responsible
Payables Specialist
 By 2014, 80% of invoices are
received electronically through
APInvoice (Avg. 430/day)
Efficiencies Gained
Process improvement benefits the University in multiple
ways –





Streamlined process increases speed of processing invoices
Reduce transit time and risk of lost invoices
Reduce postage and envelope costs for suppliers
Reduce personnel involved in process – one FTE
Savings on required supplies – went from $350/month on copy
paper to $175/month
 Reduce paper usage by 5 cases/month
 Shredding pick-ups reduced to once every two months; an annual
savings of approx. $8,000.
 Departments able to view invoice images in the system
Received CUSP Award
Electronic Invoicing through CU
Marketplace
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
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
Payment Plus
• US Bank credit card product used at payment stage of procure-topay 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
Commercial Card Program
Card Program Volume
FY2012
$121,640,648
FY2013
$129,183,154
FY2014
$144,293,421
FY2015
$165,667,259
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
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
Questions