Turn Accounts Payable into a Profit Center. Sandy Shropshire Vice President Business Development

Transcription

1 Turn Accounts Payable into a Profit Center Sandy Shropshire Vice President Business Development

2 Company Background AOC Solutions Inc.: Founded in 1996 Offices in Chantilly, VA, Morgantown, WV Satellite offices in Wisconsin, Texas, Florida, Ohio and New York Deloitte & Touche: VA Fast 50 Tech, US Fast 500 Tech Ernest & Young: Finalist for Entrepreneur of the Year INC 5000 Fastest Growing Companies 2007 AOC employs nationally recognize experts in the areas of defense, banking, federal finance, and information technology. Three affiliates, Encompass Card Management, 3Delta Systems, and FEDAC Processing Company

3 History of Purchasing Cards 1990 The first Purchasing Card was introduced to the Corporate market. Designed for small dollar, repetitive purchasing Per transaction fee Mid 90 s larger companies showed interest Fees eliminated, rebates introduced. Early 2000 s Cards A/P Cards 2004/ 2005 Card-based A/P

4 What is Card-Based AP? Card-based AP is an alternative electronic payment option used to pay vendors for invoices utilizing a Purchasing Card. Purchasing cards can provide several unique benefits when compared with other electronic payment methods, such as: Offering an existing network of millions of suppliers that accept cards for B2B payments Increased float on funds due to delayed settlement of the card statement with the issuing bank. Potential to receive revenue sharing on dollars processed.

5 The Economics of Card-Based AP Processes A portion of the dollars paid for all products and services by a Client are split between the Vendor s bank (Acquirer), the card association (Visa/MasterCard) and the card issuing bank. Revenue share is a significant portion of that percentage.

6 Why Your Company Should Consider Card-Based AP Processes? Automation Allows you to streamline your operations.. electronic processing is more efficient than paper-based processing Integrates easily with your existing accounts payable processes. It allows you to send accounts payable files directly to your card issuing bank from your enterprise resource planning or accounts payable system. Reduces expenses and errors associated with paper check processing and reconciliation. Enables timely and accurate payments to vendors and suppliers. Helps reduce costs associated with late payments and payment errors

7 Most Common Card-Based AP Options? Non-Recurring Payments - A manual AP Process typically used by buying entities for emergency or non-recurring type of purchases. Notification Process Push Payment Process

8 AP Payments: Notification Payment Process Vendor Notification Pay Client initiated AP Card Payment File to the Bank This process requires the Vendor to process the transaction via their own Point of Sale (POS) Allows Client to push payment instructions directly to supplier based upon previously received invoices Allows Client to define reminder and processing cutoff dates Account limits set to zero during non-activity time Utilizes a vendor account number or card assignment for automated oneto-one transaction reconciliation

9 AP Payments Notification Payment Process Client Notice of Approval for Payment for Waste Management Corp Vendor Name Invoice Number Invoice Date Invoice Amount Waste Management Corp AO /1/2008 $ Waste Management Corp AO /4/2008 $ Waste Management Corp AO /7/2008 $45.76 Waste Management Corp AO /6/2008 $23, Waste Management Corp AO /2/2008 $19, TOTAL APPROVED AMOUNT $43, Is Paid within 48 hours Via card network Verifies Bank Payment Is Provided Remittance Advice Processes Credit Card Your Bank Corporate Card with account number ending in 1234, has been activated for you to process payments in the amount of $43, Please charge the total amount within 72 hours. By charging the amount shown within the 72 hours, the potential for payment If you can support LEVEL II or LEVEL III line item detail, please provide the Information to assist in the reconciliation of this transaction. If you have any questions or need any assistance in processing this transaction, please contact Ms. Jane Doe, at Client by telephone at (800) or by PLEASE PROCESS THIS TRANSACTION IN THE FULL AMOUNT OF $43, WITHIN 72 HOURS TO FACILITATE THE RECONCILIATION PROCESS. processes transaction on their POS device

10 AP Payments: Push Payment Process Push Pay Client initiated AP File that requires no supplier intervention Same file as used for the notification type payment Allows client to push payment directly to supplier based upon previously received invoices Features a vendor ghost account assignment for automated one-to-one transaction reconciliation No card information in the hands of the supplier to help reduce potential fraudulent charges Only last four of card number is sent so the Vendor never sees the entire card account or other information required to process a transaction. Account limits set to zero during non-activity times Payment notification processed within minutes after files are received prior to cutoff time established by card processor

11 AP Payments Push Payment Process Client sends AP File to Bank The Bank Card assigned limits changed real-time Verifies Bank Payment Client AOC File transmission sent and processed through secure payment gateway Is Paid within 48 hours Via card network Is Provided Remittance Advice File contains invoice information from the Client AP System AP Payment Gateway Payment Made Payment pushed on behalf of supplier

12 AP Payments Sample Notification of Payment Logo can typically be customized by Client Provides information about The Buyer (The County The Seller (County Vendor) Card Transaction Details Invoice Information

13 Vendor Participation What s in it from your vendor? The following are some of the benefits to suppliers when cards are used in place of checks: Faster Payment and Settlement - Card payments generally take only a fraction of the time required for check settlement. Funds Availability - card payments are settled electronically, it is virtually assured that the funds are available when the transaction is processed. Process Streamlining accounts receivable is also streamlined Improved Customer Relations especially in more competitive industries

14 Vendor Participation The Card-Based AP Payment process does require vendor notification of payment change. Vendors have to either agree to accept card payments or be enrolled to accept payment from you. You will have greater success if you utilize a card issuer who has significant experience with AP Vendor enrollment. Your participation and support in the enrollment process greatly increases vendors willing to participate.

15 Questions??