• Careful selection of the initial account holders helps ensure program success, allows for proactive program fine tuning and brings quick resolution to program issues. Poor account holder selection increases the risk of “perpetual pilots” and resistance to a program.
• Select account holders who most frequently request cheques or buy the commodities selected for the program. The Corporate Purchasing Card program yields the most benefit when the account holder is the actual user of the item or service.
• Choose account holders that are well-respected. This group has the ability to champion, at the peer level, the program beyond the pilot phase.
• Select account holders, plants or sites that will be the most difficult to convert. The most difficult customer likely will be the strongest proponents of the program after the program has proven itself to this group.
Supplier Strategies
• Determine potential
suppliers to include in your program by analyzing your current supplier database and/or financial system and develop a specific action plan to prioritize.
• Choose preferred suppliers from those with high
transaction/high dollar volume and non-preferred suppliers from those with low transaction/low dollar volume.
• Use suppliers who already accept American Express, where appropriate. This will reduce implementation time and allow for faster ramp up of one’s program. These suppliers have already received training and some have systems directly integrated with American Express.
• The practice of building strategic supplier partnerships increases negotiating power with preferred suppliers and eventually leads to overall purchase price reduction. • Take an active role in
contacting, educating, enrolling and training suppliers.
• Establish clear audit standards and procedures and promote adherence to Card usage through effective communication of policies and establishment of corrective measures.
• Establish internal control policy by defining the basic responsibilities of each group within the organization participating in the program (Cardmember, accounting, purchasing, department/cost center manager, and Program Administrator).
• Based on account type and supplier strategies, determine the appropriate spending thresholds. Additionally,
determine purchases and suppliers that should be
excluded from the program. Define key compliance areas (e.g., tax, preferred suppliers, reconciliation, internal procedures).
• Use American Express reports and transaction data to assist with compliance reporting.
• Initial audits should focus on ensuring that policies and procedures were adequately understood and properly applied by end-users.
• On-going periodic audits of transaction data for accuracy and completeness should occur once the program is fully running.
Audit/Control/Compliance Card Type Strategies
• Use the Card for the high volume transaction commodities and/or suppliers, as well as high dollar transactions with key strategic suppliers. • Select the right account
type.
• Use the Card/account for any transactions that are currently billed in a consolidated format and require back-end
processing for account distribution.
• Deploy the Card to the locations creating the most cheque requests, purchase orders or invoice transactions.
Financial Systems
• Establish financial system data requirements as part of the program design, including mapping process (downloading Corporate Purchasing Card transaction data from the reconciliation tool and importing into the company’s financial system, such as the GL).
• Communicate financial system data requirements to American Express as an integral part of account design and setup.
• Build an effective process for changes/corrections to Corporate Purchasing Card data prior to import into financial system.
• Achieve maximum process improvement by placing responsibility for reconciliation of transaction data with the Card/account holder.
• Determine payment process to the Card issuer
• Interface the Card data directly to accounts payable or the GL via CAR interface module or data file. This process removes accounting and accounts payable personnel from daily transaction processing to perform more value-added tasks.
Tax Compliance
• Involve your tax
professional early in the process of implementing a Corporate Purchasing Card program.
• Develop a company policy for handling sales tax on the transactions generated by Level 1 suppliers. Using our reconciliation tool, American Express can estimate taxes based on merchant province, Cardmember province, or turn the tax
calculation off.
• Recommend preferred suppliers to be “Level 3/Corporate Purchasing Card capable” in order to capture actual sales tax and other enhanced information.
Data Requirements
• Determine data and reporting requirements early in the account design; establish a solid “hierarchy” that provides the basis for American Express reporting.
• Program management is best served when
technology and automation replace manual processing that can be error-prone and costly. Technology increases efficiency and control.
• Role of client technologies team should be clearly defined and resources allocated appropriately. • The use of client-defined
Cardmember data fields (employee ID, cost center, universal field), in
conjunction with the Corporate Account Reconciliation tool, can
• Employ the Cardmember reference field at Level 3 point of sale suppliers to further characterize the transaction (i.e., override basic accounting defaults for Cardmembers who purchase for multiple cost centers, or capture
purchase order number, requisition, work order, project numbers, etc).
• Communicate client-
specific data requirements to the supplier(s) that have been enabled to capture Level 3 data via supplier seminars, one- on-one training, etc.
Provide timely feedback to the supplier regarding the accuracy of the data input at point of sale.