Taking commercial cards to the next levelCard Optimization

May 2017

Kris Carrera, SVP, Financial Services Product Development

Dee Moore, SVP, BB&T Commercial Card Manager

Agenda

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• Program Optimization

• Understand Your Clients

• Defining Potential

• Best Practices

3

Program Optimization

• What is Program Optimization?

• Commercial Card Program Optimization assists clients in improving the effectiveness of their procurement and travel programs

• Identifies opportunities to increase the use of the commercial card

• Provides insight for improvement opportunities within the program

• Generates recommendations for improving the program

Program Optimization

Approach

Evaluate Opportunity/Enroll

client

Analyze Accounts Payable Data

Produce Interim Results

Conduct Client Interviews

Track Progress Deliver Results

* Activities may be modified as appropriate to meet clients objectives

Understanding Your Customer

• The first, and most important, step is to understand the client’s key people, the policies and processes they have to work with, and the problems they experience.

• Clients are not card or payments experts. Therefore, a great way to build empathy is to become the trusted advisor that provides access to good data points which can help them with their business case.

– Provide data points that are relevant to the client and not a data dump of disconnected facts, figures, and product information.

• There needs to be a dialogue and an understanding of the context surrounding card payments versus other payment options.

• Bank’s primary objective should be to educate clients on how the appropriate card products can address their specific business needs.

Defining Potential

• Complete a Supplier Match

• Evaluate a card program on key performance indicators

• Demonstrate the potential opportunity available using Benchmarking tools.

Defining Potential

Best Practices

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Best Practice

Companies are…..

Targeting verticals

Capturing significant expenses

Mandating more

Taking control of vendors’

Benefiting from greater data integration/automation

Expanding into EAP products

Best Practices

“Top Ten” for Optimizing your portfolio:

• Provide clear payment guidelines to employees and recommend that transactions under a certain dollar amount be paid by commercial card.

#9

A typical amount for companies is $2,500 - $5,000

Require card usage for small dollar purchases

• Effective cardholder training allows organizations to increase compliance and yet expand the card program spend

10#

Work with your clients to leverage available best practices and training

materials and policies

Require training for all cardholders

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• Body text level 1 – Arial 14 pt bold dark teal

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– Body text level 2 – Arial 12 pt dark teal

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Body text level 3 – Arial 10 pt dark teal

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• Font: always Arial - for text and drawings

• For highlighting text use jade, or purple

• Avoid font effects such as underline, shadow, emboss

• Limit the use of italics and uppercases

• All text is sentence case (only first letter of first word is capitalized)

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Companies may be missing card payment opportunities if the appropriate staff (e.g., accounts payable managers, and operations managers) do not have access to a card.

Expand access to cards#7

Analyze accounts payable data to identify frequent buyers of goods and services that are eligible for card payment. Cross reference these buyers to those who have authority to use a card to determine who else should have a card.

Increase card limits

Individual transaction and monthly limits should be in line with employee purchasing responsibilities to ensure card utility.

#8

It is important to balance ease-of-use and card controls. Review decline reports for transactions that have been denied due to dollar limits and adjust card limits to the upper limit of those declines.

Best Practices

Supplier Payment Slippage Analysis

Sometimes one supplier is paid via multiple methods including card. This practice prevents both parties from capturing the full benefits of a card payment.

Determine which suppliers are paid with a commercial card and by other methods, consider migrating these suppliers to be paid solely with a Visa payment. Publish a list of suppliers who can be paid by card and encourage employees to pay with a commercial card.

#5

Best Practices

Target specific spend categories

Using the card for certain spend types enables a consistent view of spending across a category. This also helps with supplier management and spend visibility.

Choose spend categories to migrate to card payments. Mandate or encourage commercial card payment of these categories. Update program policies and procedures accordingly. Perform a spend analysis to identify the best spend categories to use a card payment solution.

#6

Unblock MCC codes

Overly restrictive MCC blocking can limit the usefulness of the card program and confuse employees making eligible purchases

Review decline reports for legitimate transactions that have been declined due to blocked MCC codes and unblock these codes . Have Scotiabank assess decline data to determine which MCC codes to unblock based upon your card program policy.

#3

Best Practices

• A ghost card is a virtual purchasing account that does not involve use of an actual card. Ghost cards offer a convenient payment method for individuals without card accounts while also streamlining the payment process.

Set up ghost accounts#4

Ghost accounts can be assigned to a single department, spend type, or supplier. Areas of use include airfare purchases, recurring charges, payment of e-Procurement suppliers, and corporate event expenses.

Best Practices

Engage Senior Leadership in Championing the Card Program

Having a champion within the Executive team ensures continued buy-in and support for the card program

#1

Assist client in quantifying benefits so that Leadership will promote the Program

Use the commercial card in Accounts Payable

Invoice processing and check payment are manually-intensive and require significant time and effort. Perform an analysis of your AP payable processing and implement an automated solution where authorization processes remain the same but card is the method of payment

#2

Reach out to your suppliers to educate and inform them on the benefits of the revised payment process.

Optimization Success

It’s a team effort …client, bank, vendor partners

The bank must provide…..

• Expertise

• Resourcing

• Tools

To be successful …be involved every step of the way!

Dee Moore & Kris Carrera