Introduction To Purchasing Card Principles

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Introduction To Purchasing Card Principles
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Objectives
At the end of this training session, you will be
able to

• Define what a Purchasing Card (P-card) is
• List the benefits of using a P-Card
• List the instances when you use a P-Card
• List restrictions of using the P-Card
• List your responsibilities regarding the P-Card
• List the steps to follow when the products order
  are defective or incorrect
• List the people involved in the Purchasing Card
  Approval Process
• List available Purchasing Card resources

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What is a Purchasing Card (P-Card)?

• It is a Visa credit card with your name and GSW
  State Universitys name embossed on the card
• The credit card is issued by Bank of America to
  purchase goods/items on behalf of GSW
• GSW is responsible for the payment of the
  goods/items you purchase on the credit card

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How it all works Behind the Scenes
Pay on Order
Payment is made with P-Card to vendor Buyer
receives Receipt via email
Transaction goes to vendor and into their
Merchant Bank
Vendor creates Receipt of purchase online
Payment
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What are the Benefits of Using a P-Card?

• Offer the opportunity to streamline the processes
  of procuring and paying for goods and services
• Reduces the administrative process costs
• Reduces the volume of accounts payable
  transactions
• Reduce costs associated with small dollar
  purchases
• Streamline purchasing and payment procedures
• Reduce the administrative burden
• Simplifies and automates the purchasing and
  payment process
• Reduces purchasing cycle time and expedites
  delivery
• Provides management information
• Allows reallocation of resources to more mission
  critical needs
• Expands number of possible merchants
• Increases competition
• Typically, 80 of transactions only represent 20
  of total dollars spent

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Consider the Benefits of the Purchasing Cards
1/2 to 1 Day
1 to 2 Days
1/2 to 1 Day
5 to 6 Days
1-2 Days
1 to 2 Days
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Consider the Benefits of the Purchasing Cards
X
X
1/2 to 1 Day
1 to 2 Days
1/2 to 1 Day
X
X
X
X
X
1 to 2 Days
5 to 6 Days
1-2 Days
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Consider the Benefits of Purchasing Cards

• Purchasing Cards improve procurement cycle times
• According to the 2005 Purchasing Card Benchmark
  Survey, the average procurement cycle is reduced
  by 6.3 days
• Suppliers are paid within 48-72 hours of a posted
  transaction
• Employees receive goods/services faster

Procurement cycle is reduced by 68
(determination of employee need until the
receipt of ordered goods
9.26 days Avg. cycle time with traditional PO
method
6.3 days Resulting cycle time reduction with
P-Card
2.96 days Avg. cycle time of P-Card transaction


RPMG Research Group
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Consider the Benefits of Purchasing Cards

• Cost breakdown of Traditional PO and P-Card
  Transactions
• PO Purchasing Card

RPMG Research Group
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Consider the Benefits of Purchasing Cards

• The elimination of process steps results in
  transaction cost savings
• According to the 2005 Purchasing Card Benchmark
  Survey, the average cost of a traditional PO
  based process was reported by respondents to be
  about 90
• The average cost of a Purchasing Card transaction
  was estimated to be about 22

A process cost reduction of 68,000 for every
1000 transactions migrated to P-Card
89.21 Avg. cost of traditional PO method
21.83 Avg. cost of P-Card transaction
67.38 Resulting cost reduction with P-Card


RPMG Research Group
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When Do You Use a P-Card?
When you purchase a small-dollar supply item
When you purchase off a statewide or agency
contract that accepts the purchasing card
When you pay for a minor repair on office,
warehouse, or lab equipment
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Where Can You Use a P-Card?
Your monthly limit is based on expected P-Card use
Your department determines your P-Card limits
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Some of the Restrictions
You cannot use your card to pay for
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Some of the Restrictions
You cannot use your card to pay for
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Things You Must Do Regarding Your P-Card
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What Rules Do You Follow?
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Things You Must Do Regarding Your P-Card

• Ensure complete understanding of GSWs
  reconciliation process
• Maintain a copy of all receipts
• Review and maintain reconciliation documents
• Follow the procedures regarding Cardholder
  approvals
• Follow the established purchasing guidelines
• Maintain adequate documentation (WHAT, WHY,
  WHERE/location)
• Tape ALL small receipts to an 8-1/2 x 11 sheet of
  paper
• Summary Sheets due by the 10th of each month by 3
  PM

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Things to Watch For

• Make sure that Sales Tax is not charged on your
  purchases

What happens if you realize you were charged for
Sales Tax a. Contact the vendor immediately
and document your actions b. Have the Vendor
issue a credit for the sales tax amount c. If the
Vendor refuses or is unable to refund the sales
tax, document their response and keep with your
receipts. The Tax and Use Form is available on
the Business Forms page
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When Is Your P-Card Suspended?
Your P-Card can be suspended because

• you do not follow the States and GSWs policy
  and procedures
• you do not complete your reconciliation process
  in a timely manner (due by the 10th of each month
  by 3 PM)
• of habitual misuse
• of fraudulent activity. When this is the case,
  you will be terminated and prosecuted

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When Do You Cancel Your P-Card?
Your can cancel your P-Card when

• you are leaving employment
• you are taking extended leave from your job

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What Happens When the Product is Broken or You
Did not Order It?

• Contact the vendor immediately and document your
  actions
• If you are unhappy with the vendors response,
  contact your Purchasing Card Program Coordinator
  to initiate a Dispute
• If you do not recognize a charge, contact the
  vendor for a proof of purchase or delivery
• If you suspect fraudulent activity contact your
  Purchasing Card Program Coordinator immediately
  for further instructions

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Who is in the Chain of Command?
Statewide Purchasing Card Program Manager
Entitys Purchasing Card Program Administrator
(APO or CUPO)
Entitys Purchasing Card Program Coordinator
Entity Accountant
Entity Reviewer/Approver
Entity Cardholder
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P-Card Program Resources

• To review GSWs Purchasing Card Policy, go to the
  Business Forms page and click on Procurement Card
  Policy
• To review Georgia State Purchasing Card Policy
  and on-line resources
• http//statepurchasing.doas.ga.gov/00/channel_titl
  e/0,2094,35226973_36298628,00.html

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P-Card Program Resources

• To review WORKS Payment Manager on-line training
  materials
• https//payment2.works.com/wpm/bookmark
• To contact P-Card Administrator nrooks_at_gsw.edu
• To contact P-Card Coordinator atallent_at_gsw.edu

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Questions?