pCards for Schools NOW more than EVER n

p-Cards for Schools: NOW more than EVER

n We are all so busy doing our jobs we don’t take the time to think about what our job is and what it is becoming.

Now more than ever – 2013 we need to examine and re-examine everything we do and take current best practices and make them obsolete.

One such business practice is purchasing and accounts payable.

FACT: In good economic times schools spend money! In bad economic times schools spend money!

Some basic school business operations “rules of thumb” 70 -75% of budget funds employee salaries and benefits. n 58 – 60% of non payroll checks are for less then $500. n 80% of non payroll expenditures are made by 20% of the employees. n

FACT: It costs money to spend money QUESTION? What does it actually cost to process a P. O. from beginning to end?

What does it actually cost to process a PO from start to finish? Requisition n Approval n Purchasing n Receiving n Accounts Payable n

What are the Experts Saying? “The average cost of processing a purchase order manually is between $75 - $200. Automating procurement reduces that cost to between $10 $40. . . The Return-On-Investment (ROI) is amazing. ” Deloitte Consulting

Real example of reducing paperwork Naperville 203 o 2001 - 9, 847 PO’s o 2006 – 4, 724 PO’s o Saved 5, 123 PO’s n

The reduction of PO’s has also resulted in the reduction of checks written Naperville 203 (Cont’d) n 2001 – 16, 954 Checks Written n 2006 – 8, 689 Checks Written Savings of 8, 265 Checks!

Bench Marking Questions n How many non-payroll checks are written each month? n What percentage are for less than $500?

How many of these small transactions each month could be consolidated into one payment? (check or ACH)

NOT All p-Card programs are alike!

P-Cards Should Not/Will Not Eliminate all of the Purchase Orders a district uses – whether paper or electronic! (Only the many small PO’s will be eliminated) § Change what you buy § Who you buy from § When you buy n

Key to Consolidating Small Purchases into one payment: n As a minimum Get p-Cards into the hands of as many employees as you can who are currently making small purchases/ generating PO’s of less than $1, 000.

What are p-Cards? ( P stands for payment) They look and operate similar to credit cards. n They do not carry a revolving line of credit. n Usage and authorization parameters can be reviewed and managed via the internet by district administration. n

Specific card use parameters can be established for each card n Transaction n Monthly limits per charge limits n Preferred Supplier Restriction

Customized Card design can display: n n n Card holder name School District name and number and/or Tax ID 2 Lines of text per card Department Cards Ghost Cards

Advantages of an Association Sponsored Program Single Contract n Creates a user group/support network n Negotiation clout n Due diligence costs eliminated n No Costs n No Fees n No Charges n Rebates n

Rebate Distribution n Rebates are calculated in April on the total amount of spend from April 1 – March 31 and the rebate is distributed in May to Illinois ASBO. n Illinois ASBO then distributes to each partner their share – 100% of rebate generated by their schools per the Memorandum of Understanding

Billing Cycle Requirements n n n School District may choose a billing cycle cut-off of the 5 th or the 20 th. Payment is due at Harris Bank within chosen grace (7, 14, 21 or 27) days of billing cycle cut-off. ¨ Penalty for late payment (Prime + 7%) on all transactions in the billing cycle. Penalties can be avoided with pre-planning and monitoring online usage reports.

Only 3 Possible costs to participating school Late fee n ATM Charge – IF cash advance option is selected n Interest owed on any cash advance n

Billing and Payment n n Monthly Billing Statements ¨ Available online Payment Methods ¨ Automated Clearing House ¨ Check

Why was Master. Card selected? n Superior vision with technology and e-commerce n Fraud Protection insurance n Customized card design displaying the name of card holder, school district and/or tax exempt number

Why was Master. Card selected? (Continued) n Individualized training n Global acceptance at over 35 million locations n Retailers benefit from low transaction charge

Online Capabilities (24/7) “details online” n Online Program Management ¨ Submit, approve, and cancel Card accounts ¨ Instant Account Activation ¨ Adjust spending limits/manage Cardmember profiles ¨ View Cardmember charges ¨ Change accounting information n Online Information Services ¨ View/Manage Program Information ¨ Access to Web reporting tools

Vendor Benefits n n n Reduces paper processing/billing Reduces vendors’ time/costs of processing/depositing payments Reduces vendor transaction costs Vendor paid by BMO within 48 hours of shipment/pick-up Reduces the issues of partially filled orders Reduces vendors time/costs of processing & depositing of payments

Benefits of a p-Card Program for Management Easier on Accounts Payable n Submit one monthly payment vs. multiple payments to multiple vendors n Reduction in paperwork n Fraud prevention and protection through the Bank and Master. Card n Detailed reporting available 24 x 7 n Easy online administration and dedicated customer support n Control on spending limits and accepted vendors

How to Get Started 1. Download documents www. illinoispcard. com 2. Submit resolution to local board of education for purchasing card participation 3. Identify local p-Card administrators 4. Complete application packet – send to: See Check List on Website for your State

For more information, word documents and other tools, or to download all available files, please go to: www. illinois-pcard. com.

Holly Wallace 815. 753. 9083 (tel) 815. 753. 9367 (fax) hwallace@iasbo. org

p-Cards for Schools: NOW more than EVER April 2013