North America Commercial Cards Casebook

North America Commercial Cards Casebook

Treasury and Trade Solutions | Commercial Cards

Theme

Industry

Efficiency Improvement

Regulatory/ Audits

Data Security

Program Expansion and Implementation

Dear Clients,

At Citi®, we are committed to providing an exceptional customer experience by providing thorough spend visibility, offering organizations enhanced expense control. Organizations and their cardholders receive a consistent, quality product and service, wherever they do business.

Our flexible and comprehensive commercial card solution helps Public Sector entities to demonstrate the highest level of accountability over costs and secure payment processing. It is with great pleasure that we present the first ever Citi® Commercial Cards Public Sector Casebook, highlighting successful cards solutions for the unprecedented and competing financial challenges faced by public sector entities.

Throughout this casebook, we demonstrate how the commercial cards solutions have helped clients improve their treasury process efficiencies, comply with regulatory requirements and enhance overall data security. Moreover, the case studies within depict real-life examples of how organizations have benefited from our solutions to support streamlined and transparent procurement and expense management processes. The direct benefit being secure financial cost-saves in an environment where expenses are heavily scrutinized.

I sincerely hope you will find these case studies interesting and compelling; each one is a demonstration of how Citi has helped achieve clients’ critical business objectives.

Welcome

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Kind Regards,

Gonca Latif-Schmitt Head of Citi North America Commercial Cards


RELX Group 4

International Air Transport Association 6

Orica 8

West Virginia Visa Case Study 10

Citi’s Working Capital Analytics (CWCA) 12

Citi Purchase Card Program 14

Johnson Controls 16

North American Airline Co. 18

Global Telecommunications Co. 20

Nokia and Shell 23

Xerox 24

Regulatory/Audits

U.S. Marine Corps. 28

U.S. Department of the Navy 30

Social Security Administration 32

Data Security

Citi Commercial Cards Tokenization 34


Global Insurance Issuer 36

SABMiller 38

Contents

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RELX Group

RELX Group is a world-leading provider of information and analytics for professional and business customers across industries. It operates in four major market segments: Scientific, Technical and Medical; Risk and Business Analytics; Legal; and Exhibitions. The Group employs approximately 30,000 people and has offices in about 40 countries across six continents. It serves customers in more than 180 countries.

Given this global focus, RELX Group works with a variety of suppliers globally – with its employees making a significant number of business-to-business payments across numerous geographies to support the company’s day-to-day operations. Yet, RELX Group’s previous purchasing card programme did not deliver global acceptance and holistic reporting oversight – causing issues and delays with respect to procurement decisions, payment efficiencies, and supplier relationships.

RELX Group sought a purchasing card programme that would be widely accepted, providing control and visibility over decentralized buying decisions. As a result, RELX chose Citi’s Purchasing Card programme because it met these needs due to Citi’s global issuance model, maximum acceptance using the Visa and MasterCard schemes, and consolidated reporting platforms.

Greater global acceptance

RELX Group’s previous card programme faced multiple challenges regarding card acceptance – forcing the company to implement numerous different card programmes with different card issuers. Even with offering multiple card options for employees, the complexity resulted in employees using personal cards for convenience and where acceptance proved tricky.

Citi’s Purchasing Card – accepted at more than 40 million locations worldwide – has given employees far more confidence in the programme and has created significant positive momentum in terms of usage. This, in turn, has eased reconciliation, and meant that reimbursements are rarely needed to be made to employees for personal card use.

Increased reporting and visibility

Another key challenge for RELX Group with their previous purchasing card programme was incomplete reporting and lack of global payments visibility. By running multiple card programmes, RELX Group needed to merge multiple spreadsheets with Accounts Payable data in order to obtain global reporting. Not only was this inefficient, it also created potential errors and reduced faith in the quality and scope of the data.

Streamlining payment processes through Citi’s Purchasing Card Programme.


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Citi’s Purchasing Card solution, however, enables global reports to be run from the Citi Custom Reporting System (CCRS), Citi’s global data repository, providing full and immediate data analysis of the programme and employee spending habits. The solution also provides advanced reporting and transaction management tools, which is particularly beneficial to RELX Group – allowing them to see each transaction in one data depository. This single source of accurate global data has aided procurement decisions and proven a key tool in supplier negotiations, where suppliers are often working with less accurate data with respect to the volume and value of payments.

Streamlined payments process

Citi’s Purchasing Card programme has created process efficiency by automatically uploading data through Citi’s Global Card Management System (GCMS), eliminating the use of outdated manual processes. It has also resulted in operational savings by no longer requiring vendors to be set up in RELX Group’s Enterprise Resource Planning (ERP) system, nor requiring credit checks for suppliers before determining payment terms.

“As a business, we can target more business opportunities with a Citibank Visa Purchasing Card,” says Martin Stevens, Procurement Manager, European Travel and Global Corporate Cards at RELX Group. “The solution has streamlined payment processes and provided greater acceptance, visibility and reporting.”

The Challenge

As a leading information and analytics company, RELX Group sought a procurement card solution that could streamline its business-to-business payments processes in the US and Europe. RELX Group needed a card that would be widely accepted, provide greater transparency into its global payments, and reduce inefficiencies by having to combine multiple spreadsheets of accounts payable data to achieve global oversight.

The Solution

Citi’s Purchasing Card programme, which is accepted at 40 million locations, has streamlined the payments process and provided RELX Group with far greater reporting and visibility.

Reports can be run from the Citi Custom Reporting System to provide full reporting and visibility of the programme and employee spending habits – data which, crucially, RELX Group has faith in. This data is immediately uploaded in one data depository – streamlining operations and eliminating the use of manual processes and, ultimately, adding significant value to the company’s procurement decisions and negotiations.

The Result

RELX Group now has a smarter and more efficient way to make payments using Citi’s Purchasing Card programme – with greater acceptance, reporting and visibility. The success of the programme is best highlighted by its take-up in EMEA, the increased number of commercial card transactions processed and improved employee satisfaction.

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International Air Transport Association

The International Air Transport Association (IATA) is the trade association for the world’s airlines. Representing over 260 airlines in 117 countries, IATA is dedicated to developing global standards that allow for higher safety and efficiency in aviation, and to improving the understanding of the industry among decision-makers.

Seeking enhanced expense transparency and control

The international nature of IATA’s activities, along with the company’s decentralized organizational structure, posed numerous challenges to IATA in managing employees’ travel related expenses.

IATA operated with a fragmented payments structure. For example, it was composed of 37 different card schemes, featuring 17 card types. Various systems were also in place for reporting and monitoring card transactions, many of which lacked automation. Meanwhile, information management was rendered costly and unwieldy, with time consuming reconciliation processes and no central oversight.

A solution was therefore needed to enhance transparency and control over staff expenses, simplifying billing and settlement, while allowing IATA

to adopt a single, automated expense management system (EMS).

Choosing the right commercial card provider

IATA chose Citi’s T&E (travel and entertainment) solution, a payments solution with global reach especially designed for multinational companies.

The solution allows payments and transaction fees to be centrally billed, streamlining purchase and reconciliation procedures, and improving visibility into and control over IATA’s global transactions.

Citi’s T&E solution has enabled IATA to adopt a single, automated EMS that provides the trade association with comprehensive information at a global level, improving its spending oversight and enabling it to produce detailed reports in a time-efficient manner.

By allowing enhanced transparency over expenses, Citi’s T&E solution enables IATA to gain a better understanding of employee spending habits, strengthen controls and ensure targets are met.

The solution can be seamlessly integrated into the EMS, consolidating monitoring and reconciliation processes and allowing reports to be automatically produced in a standardized manner through Citi’s Custom Reporting System (CCRS).

Putting Citi’s T&E solution to work on a global scale

Commercial card solution enhances transparency and control over travel expenses.


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The solution was implemented in 2014 with great success. A total of 960 cards have been issued globally, surpassing initial estimates by 30%. As of August 2015, over 62,000 transactions in 29 countries had been processed through commercial cards, corresponding to nearly EUR17 million in payments.

The solution has enabled IATA to adopt a single, automated EMS. Following the program’s implementation, IATA’s multiple, often manual, systems for reporting, reconciling and monitoring transactions were replaced by a centralized platform, connected to the CCRS. This provides IATA with comprehensive information at a global level, improving oversight and enabling the production of detailed reports in a time-efficient manner.

Moreover, by implementing a globally consistent payments solution, IATA is now able to analyze transaction volumes and leverage the aggregated expenditures by negotiating favorable deals with vendors.

IATA’s global footprint has therefore been supported by Citi’s T&E solution. By transforming the company’s locally fragmented program into a centralized, global platform, Citi has enabled IATA to optimize information management, while increasing transparency and control over travel related expenses.

Challenge

IATA’s international activities and decentralized organizational structure made it challenging to manage employee travel-related expenses. IATA’s payment structure had 37 different schemes and 17 card types, making it fragmented and lacking in automation and oversight. IATA needed a single automated EMS, better transparency and control over staff expenses, and simplified billing and settlement.

Solution

Designed for multinational companies, Citi’s T&E payment solution streamlines purchasing procedures by centrally billing payments and transaction fees while improving visibility and control of global transactions. IATA chose this not least because it could also be seamlessly integrated into the EMS via CCRS, allowing IATA to further standardize reports to consolidate monitoring and reconciliation processes.

Result

Implementing a globally consistent payments solution now gives IATA comprehensive information that enables the company to analyze transaction volumes and negotiate favorable deals with vendors. Enhanced transparency and control over expenses also enables IATA to better understand employee spending habits, strengthen controls and ensure targets are met.

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Orica

Orica is the largest provider of explosives for mining and infrastructure, the global leader in ground support for mining and tunneling, and the leading supplier of sodium cyanide for gold extraction. It has operations in around 50 countries. Citi has been Orica’s trusted partner bank for over ten years, providing a full spectrum of global banking services including financing, M&A advisory, cash management and payment solutions worldwide.

The Challenge

Orica wanted to consolidate its local corporate card programs into a global program with a single provider in order to gain global visibility of spend, minimize the number of supplier relationships and reduce its total cost of ownership in operating a corporate card program. It required a provider with a proven class-leading solution that could meet its current and future needs as well as proactively deliver new technologies and solutions as they become available. The support and service capabilities of the provider were important and Orica paid particular attention to the policies, procedures, systems and standards used to ensure quality, timeliness and effective delivery. Orica also assessed vendors based on their implementation plans and ability to provide audits, contractual reviews and quality control to ensure compliance with agreed terms.

The Solution

Citi proposed the integration of Orica’s local and regional programs into a global program supported by regional customer service in local languages. The solution aggregates Orica’s T&E and purchasing volume to lower costs, and provides seamless data integration on a global basis with Orica’s expense management system:

• Citi Custom Reporting System (CCRS) captures expense information and facilitates reconciliation by including travel booking information alongside card transaction information

• CitiManager enables Orica’s Program Administrator to review data centrally for all activities worldwide

The Result

Citi was appointed as Orica’s Global Corporate Card provider due to its ability to offer global functionality, a local currency card offering, and customer service in local languages.

The first phase of implementation in Australia, New Zealand, Singapore, USA and Canada was completed successfully in 2012. The second phase of the project, covering countries in Latin America, Europe and Asia, will be completed by June 2013 with the final phase set to commence in July 2013.

Global corporate card program lowers costs and improves control.


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“By working with Citi as a single global corporate card provider, we have gained visibility of our total card spend and achieved cost savings by aggregating volumes. The globally consistent solution also enabled us to streamline our expense management policies and procedures to gain greater efficiency and control.” Michelle Lay, Global IT & Finance Procurement Manager, Orica

Streamlining Government Purchasing Processes in the State of West VirginiaGovernments around the world are facing the challenges of having to do more with fewer resources, while remaining transparent and improving accountability. For many governments, processes to procure goods and pay for services are inefficient, costly and provide limited visibility and control. By implementing a Visa Purchase Card program, the state of West Virginia has enhanced its stewardship of taxpayer money and models one of the most efficient and fiscally responsible procurement processes in the United States.

For the full article, please visit: https://www.citigroup.com/tts/docs/west_virginia_case_study_final_november_2012.pdf

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https://www.citigroup.com/tts/docs/west_virginia_case_study_final_november_2012.pdf

Citi Commercial Cards Helps Agency Analyze Payment Processes to Increase EfficiencyThe Challenge

Government Agencies are constantly looking for innovative ways to increase efficiency. Citi worked with a forward-thinking agency after they approached us for assistance in analyzing their existing business and payment processes to uncover missed opportunities for greater efficiency. They believed they had opportunities to expand the use of their Citi Purchase Card program by including transactions above the micro-purchase threshold and large contract spend. This increased usage would then allow the Agency to benefit from higher rebate earnings, greater spend visibility and opportunities for products beyond the traditional purchase card, like a virtual card.

The Solution

To address the Agency’s request, an analysis was conducted using Citi’s Working Capital Analytics (CWCA), a service provided to Citi Commercial Cards clients. The analysis uncovered pockets of untapped spend that could be put onto a Citi Purchase Card, leading to the increased program growth that the Agency was striving to achieve. The findings were presented in three categories: The low-hanging fruit … vendors accepting their purchase cards but also

accepting other forms of payments where the average transaction size was less than $5,000, vendors accepting their purchase cards for larger ticket amounts, and lastly vendors not currently accepting Purchase Cards as a form of payment. Citi then recommended how the Agency could improve working capital management and their supply chain strategies.

The Result

The Agency was one of the first organizations, within Citi’s SmartPay 2 program, to move forward with this type of optimization analysis. By implementing some of the suggestions that Citi presented, they saw almost immediate volume increases on their Citi Purchase Card accounts. The Agency took the optimization efforts a step further and began to educate their Purchase Card cardholders on best practices around their Purchase Card utilization. The efforts paid off with spend growth of 30% in the first quarter of 2015 and 19% in the second quarter of 2015. In addition, increased spending in specific categories like utility spend are evident. The Agency continues to look for and partner with Citi to find innovative ways to have the most efficient and optimized Purchase Card program possible.

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Agency deploys “Payment Cards” using Ghost Cards to pay Targeted SuppliersInnovation has been at the core of a Government Agency (“Agency”) Purchase Card program since the inception of SmartPay1. The Program Manager is always looking for ways to increase efficiencies, improve processes, and earn additional rebates. She achieved all three of these objectives with the Citi® Payment Card. A Payment Card is similar to a ghost account and is restricted to a pre-defined set of merchant category codes and cannot be used for any other purpose. The Challenge

The Agency’s immediate goals were to reduce the large number of paper invoices being sent to its finance offices, shrink the number of payment delinquencies, and streamline/standardize the payment process for recurring products and services. The Agency faced administrative payment challenges for recurring product and service requirements such as copier paper and maintenance, small package shipments, subscriptions, telecommunications payments and overseas utilities. These challenges often led to delayed vendor payments and a backlog of unpaid invoices. Delayed payments not only caused vendor frustration,

but also increased the Agency’s expenses due to interest and penalties charged by vendors, ultimately leading to missed rebate opportunity.

The Impact

Before the implementation of Payment Cards, Agency’s cardholders did not have an efficient and effective tool to pay for recurring products and services above or below the micro-purchase threshold. Within three years of implementations, more than $12.8 million dollars in transactions were paid using Payment Cards as opposed to submitting paper invoices to the Agency Finance offices.


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The Solution

Since the early SmartPay1 pilot, with Citi’s support, the Agency continued to expand the Payment Card program worldwide. With Citi’s Payment Card product, the agency reaped the following benefits:

• Significant reduction in the number of paper invoices sent to Finance for payment

• Accelerated vendors payments to 48 hours or less from weeks, sometimes months

• Expedited reconciliation of transactions, minimizing workload and accelerating payment of the consolidated payment card invoice

• Increased vendor satisfaction

• Increased usage of vendor tracking tools to increase management and transparency of recurring products and services

— These vendor systems significantly improved the ability for Agency’s end-users to manage embassy properties, monitor trends, identify high-energy users and take remedial actions where necessary

The Result

The Agency use of the Payment Card enabled them to standardize payment processes with specific merchants, serving to improve efficiencies, enhance card usage, and increase program rebates.

Payment Cards:

• Are issued in the name of the cardholder and contain an account number and expiration date but have no mag-stripe or Chip as with traditional Purchase Cards;

• Are restricted by the specific Merchant Category Code(s) (MCCs) associated with the preapproved product or service need;

• Are maintained like Purchase Cards accounts, which allow clients to increase/decrease monthly cycle/single purchase limits and add additional MCC templates, as needed.

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Johnson ControlsOptimizing travel and expense management with Citi Commercial Cards.

Johnson Controls is a global diversified technology and industrial leader in the building and automotive industries, serving customers in more than 150 countries.

The Challenge

With 154,000 employees worldwide, Johnson Controls wanted to improve transparency and control over their travel and entertainment (T&E) expenditure through an automated approval and reimbursement process.

The Solution

Implementing an integrated, globally consistent commercial cards program enabled the company to increase visibility on their T&E spend as well as analyze the volume and value of transactions to facilitate vendor negotiations. The automatic capture of card spend data through CitiManager, a comprehensive expense reporting tool, also facilitates a paperless T&E approval and reimbursement process across Johnson Controls’ markets in 40 currencies and 26 local languages.

Within the Asia Pacific region, the company’s commercial card program was implemented in seven countries — Hong Kong, Singapore, Japan, Korea, Malaysia, Australia and Thailand. Citi’s Commercial Card solution comprises a range of cards tailored to serve the company’s specific T&E payment needs, including the following:

• Individual Corporate Card captures business travel expenses such as hotel, meals and transportation

• Centralized Travel Account captures air ticket spend; enhanced data such as ticket number, class code, merchant name and flight routing can be provided for reconciliation

• Purchasing Card captures daily office expenses

As part of the program implementation, a dedicated Citi Regional Account Manager and Citi Commercial Cards Services Manager provided on-going, all-around support and assistance to address enquiries from Johnson Controls’ Commercial Card program administrators and cardholders.

The Result

With strong management support, corporate card usage has been fully mandated as part of Johnson Controls’ global travel policy. Over 1,000 cards have been issued in seven Asia Pacific countries to date, and the company has plans to expand their Commercial Cards Program to India and other emerging markets in the region. The successful implementation of their Commercial Card Program has completely transformed Johnson Controls’ approach to T&E management — employees benefit from faster, more convenient and secure reimbursements while the company achieves enhanced control and lower processing costs.


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“In addition to having the best geographic coverage in the region, Citi is able to deliver consistent high-quality services and solutions to support our business needs. What’s more, Citi’s paperless payment solution is highly resource-efficient, and well-aligned with Johnson Controls’ commitment to environmental sustainability.” Lisa Wu, Senior Treasury Manager, Corporate Treasury – Asia Pacific/ Middle East, Johnson Controls

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North American Airline Co.Citi Virtual Card Solution Digitizing Payment Spectrum.

Virtual Card Account (VCA) solution delivers working capital gains; offers financial rebates while reducing paper checks; streamlines end-to-end payment process.

The Challenge

For the airline, paper checks were a significant burden for the Accounts Payable (A/P) team. Treasury faced rising overhead and processing costs, along with an increased risk of check fraud and lost checks.

To address these challenges, the airline implemented a check-to-ACH payment conversion strategy in 2012, along with an upgrade to its PeopleSoft Enterprise Resource Planning (ERP) solution, standardizing A/P and Accounting across the organization. With new technology and processes in place, the airline was poised to digitize its full spend spectrum.

To achieve this critical goal, it was determined that a complete alignment of Procurement, A/P, Supply Chain Management and Treasury was needed, and a card-based payment solution would increase efficiencies by removing paper checks, as well as delivering working capital benefits. Such a solution would further complement the ACH initiative, while also turning A/P into a revenue generator via financial rebates from increased card spend.

The Solution

The company turned to longstanding banking and treasury services partner, Citi, to achieve its A/P

objectives. Citi took an end-to-end consultative approach, implementing the Citi VCA for Accounts Payable solution, which provides supplier segmentation and matching services; virtual card payment and file integration; and supplier enablement.

Citi’s comprehensive solution encompasses:

• Citi Working Capital Analytics (CWCA) — The airline utilized Citi’s proprietary analytics tool to quantify and qualify A/P spend that aligns with card-based payments. The A/P files were segmented and matched for card-based payment adoption along with suppliers already enrolled in Citi’s B2B Network. Citi and the airline jointly created an initial supplier target list of over 500 suppliers amounting to $100 million in annual spend and more than 10,000 check payments.

• Virtual Card Payment — The existing file containing approved invoices from their ERP system was integrated with Citi’s processing platform to automatically create and distribute single-use virtual card payments to vendors. Each virtual card carries unique transaction-level controls, based on the airline’s preferences, to ensure payments are processed per invoice terms. In addition, Citi was able to leverage their existing reconciliation and remittance process by using customized data files unique to each virtual card payment, allowing Treasury to match the card transaction data and payment to the unique record within PeopleSoft.


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Cumbersome paper-based processes were replaced with this seamless electronic payment solution providing automated reconciliation and vendor remittance information to the airline’s ERP system.

• Citi Supplier Enablement Services (CSES) — Citi resolved the commonly encountered supplier on-boarding challenges by developing an enrollment campaign featuring tailored marketing materials and a strategy based on Citi Working Capital Analytics’ results. Citi created co-branded marketing materials highlighting the benefits of moving from checks to VCA to maximize supplier adoption. Under the direction of a dedicated Citi campaign manager, the experienced call center agents conducted a six-week calling campaign to enroll the airline’s suppliers. For more strategic suppliers, Citi introduced the VCA program and the airline then followed up addressing any buyer-to-supplier relationship items. Citi’s campaign manager provided robust reporting metrics with detailed supplier confirmation documentation, adoption and supplier status during weekly campaign reviews, allowing for exceptional communication throughout the campaign execution.

The Result

The Citi VCA for Accounts Payable solution has been a tremendous success for the airline, seamlessly integrating single-use virtual cards into the A/P process, as well as supporting the onboarding of key suppliers.

The airline has enjoyed considerable benefits including:

• Streamlined end-to-end payment process

• Replaced ~$35 million post-invoice primarily check-based spend across 5,000+ transactions with virtual card payments

• Successfully on-boarded 163 suppliers within a 6-week campaign

• Increased security and control over vendor payments

• Reduced processing and reconciliation overhead costs

• Generated financial benefits via rebates

• Improved cash flow and days payable outstanding (DPO)

Virtual Card Payments has enabled the airline to take full advantage of significant spend capture and rebate opportunities, transforming the A/P department from a cost center into a revenue driver. The solution has also been an important contributor to the airline’s critical sustainability efforts.

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Global Telecommunications CompanyCentralized card solution delivers critical cost savings, including reduced transaction processing costs and expanded rebate opportunities.This global telecommunications company is an industry leader in providing mobile voice and data services, high-speed Internet access, local and long-distance services and IP-based communication services. The company has operations around the world with more than 200,000 employees globally.

The Challenge

Doing business around the world, supporting employees’ purchasing needs and paying suppliers for critical maintenance projects was proving to be a significant challenge for Finance Shared Services at this global telecommunications company. In order to achieve critical efficiencies, the company recognized the need to replace multiple systems that were no longer supported and offered no enhancement capabilities.

A Finance Shared Services analysis indicated that the existing process lacked efficiencies for their organization. Without a centralized system globally, the Finance Shared Services team had minimal insight into spend, impeding their ability to negotiate with merchants effectively. These process inefficiencies

were deemed responsible for missed cost reduction as well as missed rebate opportunities. The decision was made to move to a more secure, consolidated system worldwide that would streamline expense management and provide better control of spend.

Program Goals

The company’s Finance Shared Service team developed an overall strategic plan that called for a centralized card program. The initiative’s goals included:

• Integration of data

• Centralize card management to simplify purchase, reconciliation and reimbursement procedures

• Provide greater visibility into global transactions and a total enterprise view of spending

• Improve the accuracy and timeliness of expense reporting

• Streamline and standardize policy worldwide

• Handle multiple currencies for cash management and ensure worldwide acceptance

• Realize cost savings by consolidating to a single system


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Vendor Selection

To address global employee purchasing and supplier payment needs, the company turned to Citi, based on its 20-year cardholder relationship with the bank. Citi’s global network of more than 100 countries, the ability to offer a single platform for handling multiple types of expenses, and unsurpassed acceptance worldwide were key factors in the decision to implement the Citi One Card solution.

Partnering with Citi, the company worked to achieve its overarching goal of creating a single, integrated program that could handle all types of employee purchases and expenses, and supplier payments worldwide.

Program Snapshot:

Support employees’ purchasing needs and paying suppliers for critical maintenance projects

• 100,000+ cardholders in 50+ countries

• $250 million in annual global spend

• Several million in soft-dollar savings

• Reduction in staff resources

• Fewer transactions going through AP

• Rebates

The Solution

The company decided to take a holistic approach to solving its payment requirements, implementing Citi’s innovative One Card and ePayables solutions. The One Card is utilized for a range of payments, including catalogue suppliers, non-purchase order-based items, office supplies, software, recurring monthly charges and travel expenses.

By adopting a centralized system, managed from the company’s headquarters, the Citi One Card program has allowed Finance Shared Services to integrate transactions booked upfront using a daily file received from Citi and loaded into the Card Management System. The One Card solution enables a daily file for general ledger booking using automatic MCC to Expense Type mapping — resulting in as few as 5% of transactions needing to be reclassified. Transactions are loaded daily into the company’s Expense Reporting System, simplifying the process of reconciling and submitting expenses. The Card Management System is utilized to streamline the card issuance and maintenance process.

Moving away from its previous ghost card solution, the company implemented Citi’s highly secure e-Payables solution. This program allows the company’s third-party property management provider to issue Virtual Card Account (VCA) payments for maintenance work done at thousands of facilities throughout North America. Suppliers are paid through VCA requests batched to Citi semi-monthly. Once processed, suppliers receive a unique VCA number via e-mail, after which they have three months to utilize the funds. Real card numbers are never shared and restrictions are placed on how virtual card numbers can be requested. Upon reconciliation, the third-party provider sends data that is integrated into the company’s finance system. This automated solution captures critical data, such as purchase order, cost center, general ledger and invoice numbers.

The Result

Due to the streamlined application process, which requires only a few clicks, the Citi One Card solution has been adopted by more than 100,000 cardholders in over 50 countries. This centrally billed, corporate liability program is generating more than $250 million in annual global spend on 1.1 million transactions.

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Citi One Card Best Practices:

• Achieve greater control and compliance

• Policy driven

• Default spending limits

• Specific required/prohibited uses

• Annual recertification that policy has been read and acknowledged by employees

• MCC restrictions

• Single transaction limits

By consolidating most of its spend to the One Card, the company has realized critical cost savings, including reduced transaction process costs and expanded rebate opportunities. And with fewer transactions going through Accounts Payable (AP), the company has significant FTE savings, enabling the reallocation of vital resources to more strategic tasks. The company was also able to realize several million in soft-dollar savings.

Through the implementation of One Card, the company has streamlined policies and procedures and consolidated program administration. They have also extended automation and process improvements into more global markets, while eliminating foreign currency conversion fees on cross-border transactions.

The program represents a major success story for the Finance Shared Services organization at this leading global telecommunications company.

“Citi’s suite of Commercial Card solutions has delivered important benefits including driving greater control and compliance across the organization and improving the accuracy and timeliness of expense reporting,” said the Lead Financial System Analyst at the company. “It increases spend visibility, allowing the company to rationalize its supplier base as part of a global sourcing strategy.”

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Global Card Solution Clients Nokia and ShellCentralized card solution delivers critical cost savings, including reduced transaction processing costs and expanded rebate opportunities.

To view testimonial video from Nokia, Shell and other clients, please visit: http://www.citibank.com/tts/card_solutions/commercial_cards/nokia.htm#nokia_ccc_story


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http://www.citibank.com/tts/card_solutions/commercial_cards/nokia.htm#nokia_ccc_story

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XeroxVirtual Card Account solution delivers control and visibility.

With sales approaching $23 billion, Xerox is the world’s leading enterprise for business process and document management. Its technology, expertise and services enable workplaces — from small businesses to large global enterprises — to simplify the way work gets done so they operate more effectively and focus more on what matters most: their real business.

The Challenge

Consistent with their own business approach to “simplify the way work gets done so they operate more effectively and focus more on what matters most,” Xerox wanted to centrally capture and control its meetings and events spend to increase overall efficiency. With 140,000 employees serving clients in more than 160 countries, Xerox wanted to allow internal and external meeting planners to pay suppliers while maintaining full control and visibility without negatively impacting cash flow.

Xerox was seeking a solution that simplifies the process, whilst resulting in improved business efficiency while also ensuring:

• Budgets were not exceeded without approval

• Access to event-level spend detail and analysis

• Insights into supplier usage via trending reports

• Auditable spend and payment approval processes

The Solution

The Citi Commercial Card team worked closely with Xerox to create a custom Citi Virtual Card Account solution (VCA) for their meeting and events needs.

Control and Compliance: The Citi VCA solution delivers control for Xerox meetings and events by implementing efficient processes including pre-transaction approval controls, budget monitoring via ‘declining balance’ functionality, time expiration and individual spend/transaction management.

The Xerox programme administrator simply raises a purchase order, with Citi as the vendor, for the full value of the meeting and then provides access to the VCA interface using the systems user entitlement functionality, enabling the meeting planner (internal or external) access to create a Virtual Card Number for each transaction.

The meeting planner is able to define individual spend and transaction controls whilst using the custom data fields to capture relevant data points such as meeting ID and cost codes to support unique detailed reporting and analysis.

Data Capture and Spend Visibility: Citi’s global reach ensures all data capture and spend transactions, no matter where in the world the card was issued or used, are captured and consolidated into a single management reporting platform. Standard transaction data is complemented with VCA’s custom data fields (e.g. Purchase order, meeting number, cost centre) to ensure simple reconciliation and allocation.


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1. Meeting request initiated

9. Xerox AP monitor activity

real-time

2. Quote/Negotiation

4. MMC provided access to PO account & requests virtual

card with all additional data

5. Card number generated real time & sent to supplier securely

6. Supplier processes transaction

3. Agreement & P.O.

7. Merchant transaction data

8. Custom defined data

Virtual Card Accounts

Meetings Management Company (MMC)Xerox

Enhanced Reporting

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Effectively Managed Cash Flow and Payment Terms: The VCA solution enables Xerox to effectively manage cash flow and payment terms by creating post-dated card numbers that become valid the day the supplier payment is due, in addition to a monthly billing cycle and an agreed number of days to pay Citi, therefore increasing cash flow significantly.

Process Efficiency: The solution also improves process efficiency by eliminating the need for suppliers to be in SAP. Xerox can apply a standard internal process model across its global footprint, irrespective of language or currency — VCA can be issued in more than 22 currencies and used for payment anywhere in the world.

The Result

A successful pilot in the fourth quarter of 2011 which was assured by Xerox’s commitment of resources, the engagement of stakeholders, including meeting managers, finance, back office reconciliation and senior sponsors, and the involvement of a willing third-party.

As the solution continues to be rolled out, across geographies and third-party planners, Xerox will be able to capture, control and report all meetings and event-related spend. The VCA delivers enhanced reconciliation capabilities, 100% visibility of line-item meeting component costs, detailed reporting and fully auditable approval workflows.

Meeting planners now have a secure and efficient way to pay suppliers in a timely manner, without having to wait for the accounts payable process, and supplier relationships have improved as they are paid faster. The solution is fully auditable and supported by GCMS reporting.

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With 140,000 employees serving clients in more than 160 countries, Xerox wanted to allow internal and external meeting planners to pay suppliers while maintaining full control and visibility without negatively impacting cash flow.


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U.S. Marine CorpsCiti® and U.S. Marine Corps Partnership Creates an Improved Permanent Change of Station (PCS) Entitlement Process.

The Challenge

In response to a Congressional mandate to improve audit readiness, visibility and control of all travel-related expenses, the United States Marine Corps required a systemic enhancement to the Permanent Change of Station (PCS) travel entitlement process. In addition to improved auditability, the Marine Corps also required this enhancement to support the need for a reduction of Treasury costs related to cash advances for travel, the elimination of Defense Finance Accounting Service (DFAS) fees associated with centrally billed accounts, and the minimization of hours required to manually process travel claims. The Marine Corps was also required to maintain low cardholder delinquency rates while increasing travel card rebates.

The Solution

To address these mandated changes, the Marine Corps turned to Citi for assistance in creating a process that would support this new requirement that allows travelers to utilize the Government Travel Charge Card (GTCC) during a PCS move instead of having to obtain cash advances (which was the primary method before the mandate). This partnership between Citi®

and the Marine Corps led to the creation of a custom file that was integrated with the CitiManager® Card Management System providing a means to repeat and automate the management of accounts. The new process begins with the Marine Corps collecting traveler information such as number of family members and mode of travel which will be used to calculate the estimated travel expenses. The traveler interview is conducted by the traveler using the Marine Corps internal human resources tool, Marine OnLine. This interview process is initiated when a traveler is issued PCS orders. The Marine Corps then creates a daily cardholder management file that is delivered to Citi via a secure government portal. When processed, this file automatically updates cardholder accounts with future activation and deactivation dates as indicated in the file. On the activation date, the card is automatically activated and placed into a PCS Status. This PCS Status allows cardholders to use their GTCCs at retail merchants, where they may have been previously blocked from accepting these cards, for their dislocation allowance, temporary lodging expenses, and other PCS-related travel expenses. On the deactivation date, the card automatically deactivates and is no longer available for use.


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The Result

The Marine Corps’ own estimates show that the PCS process standardization effort could possibly eliminate more than 11,000 cash advances for PCS travel and provide an expected annual savings in excess of $30,000,000. They also estimate that they could reduce current workloads of travelers, administrators and financial personnel by more than 34,000 work-hours annually. Additionally, capturing PCS on the GTCC will increase charge volume and deliver larger travel card program rebates.

The Marine Corps will also begin to capture transactional data for PCS-related expenses on the GTCC. This data which is readily available in the Citibank® Custom Reporting System (CCRS) can be now be utilized to create reports that will support mandated auditing efforts as well as potential strategic sourcing initiatives.

Additionally, this method provides the traveler with a safe and secure tool to access PCS entitlements, eliminates the need to use personal funds for travel, and includes additional cardholder benefits such as travel insurance and emergency assistance services.

The Marine Corps’ own estimates show that the PCS process standardization effort could possibly eliminate more than 11,000 cash advances for PCS travel and provide an expected annual savings in excess of $30,000,000.

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U.S. Department of the Navy

The Department of the Navy, one of three military departments with the U.S. Department of Defense, is comprised of two armed services branches: the U.S. Navy and the U.S. Marine Corps. Combined, these branches have more than 500,000 active duty personnel and more than 150,000 reserve personnel.

The Challenge

When the Department of the Navy implemented a purchasing card program more than 13 years ago under a U.S. Department of Defense contract with Citi, card usage among Navy and Marine personnel quickly grew to more than 30,000 accounts. However, as card use increased for a wide range of goods and services, so did incidents of improper card use, creating the need for stronger internal controls and more effective card program oversight. Further, the Department of the Navy desired an electronic and automated approach to conducting the manually intensive monthly and semi-annual reviews to ensure effectiveness of purchase card program internal controls.

The Solution

In response, the Department of the Navy, in partnership with Citi, developed the Program Audit Tool, an online application that eases the oversight

of its purchase card program and ensures effective internal control processes.

The tool established standardized procedures for reviewing card transactions, calling attention to transactions of interest and thereby minimizing the potential for card fraud, abuse and misuse. It also supports internal control processes that include monthly reviews by card program coordinators and semi-annual management reviews.

Program Audit Tool features that improve oversight and controls include:

• Data mining and reporting: The tool provides ready access to command, regional or unit-specific purchase card transactional and account information, making it easy to review an entire portfolio of accounts or specific transactions as needed. Program coordinators also can quickly generate the information they need to verify effectiveness of internal control like excessive credit limits, cardholder training status, inactive accounts and other key program controls.

• Customizable search criteria: Search criteria can be customized to flag transactions that represent possible policy infractions. Plus, transaction search criteria can be customized to unit-specific missions or activities and can include, for instance, predefined timeframes and thresholds for merchant category codes or dollar amounts.

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Improving card program oversight with Citi’s Program Audit Tool.


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• Automatic reports and notifications: Each billing cycle, the Program Audit Tool automatically generates a consolidated report, enabling program coordinators to review all questionable transactions. When individual reviews are complete, the tool generates e-mail notifications with the progress and results of the reviews.

The Program Audit Tool also automatically assesses the effectiveness of internal controls and corrective actions to assure approving officials and program coordinators that the card program is operating successfully.

As an added benefit, the tool also automatically produces reports for senior management reviews that, in addition to providing data on accounts, personnel and purchases, allow them to assess the program’s health.

The Result

The Program Audit Tool addressed the Department of the Navy’s key internal control problems, standardizing processes across all units, enhancing oversight of its purchase card program, and improving its ability to monitor, detect and take action on improper card use.

Specific benefits include:

• More accurate and efficient audit of cardholder transactions, including the reduction of manual audits to five percent or less, as the result of customizable filters and exception modeling.

• E-mail alerts and reports that ensure personnel fulfill their monthly oversight responsibilities.

• Thorough and consistent reviews across the Department of the Navy’s Purchase Card Program thanks to automation that supports strict audit guidelines and features built-in workflows.

• Increased data visibility and accessibility, including complete snapshots of transaction activity across the entire card program, plus step-by-step documentation of all transactions and reviews throughout the audit process.

• Robust lines of communication, including automatic flow of information, e-mail alerts and 24/7 online access to program information.

• Ability to aggregate monthly reviews to support semi-annual effectiveness assessments by senior leaders of internal controls and disciplinary actions, and also to continually improve controls and processes.

• Archive of transaction and program review results.

• Standardized documentation of internal control compliance.

Treasury & Risk magazine, in 2009, recognized the Program Audit Tool as a best-in-class solution and honored Citi and the Department of the Navy with its prestigious Alexander Hamilton Award.

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Social Security AdministrationCiti’s Online Reporting Tools Lead to Positive Audit Results for the Social Security Administration.The Challenge

Audits can be challenging for large and small organizations alike. They can be particularly daunting when dealing with government rules and regulations. The Government Charge Card Abuse Prevention Act of 2012 (The Act) requires the Inspector General (IG) of executive agencies with over $10,000,000 in yearly travel card spend (The Social Security Administration (SSA) spends over $20,000,000 annually) to conduct a yearly audit to analyze risks of improper use and erroneous payments. When the SSA Card Program received this headline on Fedweek.com, “SSA Gets Rare Positive Review on Charge Cards,” the Travel Card Management team explained how they use the Citi tools to monitor their more than 15,000 accounts and how they achieved the positive review.

The Solution

In an effort to pass the audit, SSA documented internal controls that were currently in place to help manage risk effectively. For example, the program coordinators use Citi’s proprietary reporting tools, Citi Custom Reporting System (CCRS) and the CitiManager® web tool, to monitor monthly account activity. CCRS has robust reporting capabilities and approximately 40 pre-made audit reports to assist agencies with detecting improper use.

During their monthly review of account activity, the coordinators would flag any suspicious activity and then follow up with cardholders directly, by e-mail or phone, to determine if the transactions were or were not improper. The coordinators also kept track of when their cardholders were or were not traveling, and would often lower the spending limit to $1 so the accounts could not be used for accidental, non-business-related expenses.

Additionally, the SSA lowered limits on ATM withdrawals to avoid unnecessary cash withdrawals. By using the CitiManager web tool, it was easy to quickly lower spending limits or prevent cards from being used while the suspicious activity was investigated.

The Result

Diligent program management through use of Citi’s online program management tools proved to be a winning combination in achieving a favorable audit and minimizing risk and improper use within the SSA Government Card program.


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Citi Commercial Cards TokenizationNext-generation technology to help protect cardholder data.The Challenge

Data breaches are a major concern for corporate and government agencies alike. According to the Identity Theft Resource Center, there were 5,810 data breaches in 2015 which exposed close to 850 million records. Furthermore, according to Verizon’s 2015 Data Breach Investigations Report (DBIR), public sector institutions are one of the top three sectors targeted by cyber criminals.

An independent agency (“Agency”) of the United States federal government worked diligently to prevent data breaches related to customer payment transactions, ensuring its networks and databases are Payment Card Industry Data Security Standard (PCI DSS) compliant. However, the Agency realized that its commercial card program, which utilized separate databases within their own organization, might remain vulnerable. Employee data within the travel expense management and accounts payable systems still needed to be protected from the potential risk of fraud. Faced with this challenge, the Agency decided to take proactive steps, in addition to the measures Citi was already taking, to mitigate the risk of a potentially damaging data breach.

The Solution

The Agency turned to Citi to develop a strategy for mitigating commercial card fraud risk. In response, Citi implemented its Commercial Cards Tokenization solution to address their concerns around information security. The solution involved employee cardholder data being transmitted to Citi via a one-time, secure transfer process. Primary card account numbers were replaced with randomly generated numbers which act as tokens. These tokens are then stored in Citi’s highly secure environment.

The Agency uses the custom tokens within their expense and accounts payable systems in place of actual employee card account numbers. Citi is in the process of rolling out this technology more widely.

The Citi Tokenization solution seamlessly integrated with the Agency’s commercial card systems and processes. All payment files transmitted between the Agency and Citi utilize the tokenization process, reducing the risk of transmitting files with actual card

Card Number: 4321 5678 9012 1234

Tokenized Number: 4695 9351 6487 4421


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data and enabling the Agency to run its operations without vulnerable card data in its environment. Citi retains the virtual key to unlock the tokens and, as a result, all Agency commercial card systems remain secure.

The Result

The Agency was able to implement Citi’s Tokenization solution with minimal internal technology resources required and was successful in removing sensitive cardholder data from their internal systems. This means there is less personal data attached to cardholders within the company’s internal applications, which in turn means those internal applications don’t need to be audited because there’s no exposed to PCI* information. At the same time, by eliminating many challenges related to compliance, the Agency is able to reallocate resources to other value-added activities and revenue-generating efforts. In addition, employee data is better protected, reputational damage from a breach may be avoided, and costs can be reduced by not having to re-issue commercial cards as a result of an attack.

By implementing the innovative Citi Commercial Cards Tokenization solution, the Agency has taken a highly proactive approach to fraud prevention, providing much-needed safeguards and controls over employee data. This game-changing initiative offers the Agency real peace of mind in the never-ending battle against fraudsters.

As a trusted advisor with extensive fraud prevention experience, Citi was able to help the Agency protect vital employee data and reduce the threat of a potential breach.

* PCI refers to the Payment Card Industry’s Data Security Standard which is a set of requirements designated to ensure that all companies that process, store or transmit credit card information maintain a secure environment.

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A Major Global Insurance IssuerCiti’s Commercial Cards solution improves visibility and facilitates global expansion.

A major international insurance organisation, serving commercial, institutional and individual customers in more than 130 countries, wanted to centralise its global travel spend. It needed a scalable card solution that could accommodate high levels of acceptance worldwide and support its global expansion plans.

The company sought to streamline processes associated with its employees’ use of travel and entertainment (T&E) cards. Its objectives were to increase visibility and control of expense spend, decrease employee out-of-pocket expenses and reduce the time spent by cardholders on manual reconciliation of expenses claims.

In line with the company-wide digital strategy, it required online statements and card applications. The company also wanted a corporate card that would seamlessly integrate with the expense management solution it had selected.

Supporting global expansion

Citi’s Commercial Cards solution for the large global insurance issuer uses the Visa and MasterCard networks, and is accepted at more than 35 million merchants, which means cardholders can readily draw on the strength of Citi’s global footprint.

Citi began a phased implementation in Europe working closely with the insurer, which was simultaneously rolled out with its expense management solution, and this was then implemented in North America. Citi’s unique proprietary global footprint has subsequently helped to facilitate the insurer’s expansion in emerging markets in the Middle East and Africa, and other markets are now being considered.


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Improving visibility using streamlined processes

The company’s solution simplifies expense management and improves spend visibility. The number of active card accounts has increased by 14% over the past year while projected spend is set to remain steady at 5–10%. As a result, travel policy compliance has increased, and rebates from the programme have doubled in the past year. Citi’s Custom Reporting System provides the insurer with detailed information relating to global spend.

The solution offers Combipay, which allows cardholder charges (which have been approved through the expense management system) to be paid centrally by the company.

Boosting digital adoption

The global insurer’s statements and applications are now 100% online, and the solution is fully integrated with its expense management solution. Citi sends a daily transaction fi le directly to the company’s expense management solution, meaning that cardholders have to spend less time manually reconciling expenses.

The company’s solution simplifies expense management and improves spend visibility. The number of active card accounts has increased by 14% over the past year while projected spend is set to remain steady at 5–10%.

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SABMillerToasting Success. SABMiller is the second largest global brewer with more than 200 beer brands and some 70,000 employees in over 80 countries. Their portfolio of businesses spans five continents’ (Europe, North America, South America, Africa, Asia), developed through a culture of operational excellence, delivering high quality products, innovation and sustainable growth.The challenge

SABMiller undertook a global project to standardise its processes and procedures, and at the same time upgrade its SAP ERP accounting system. As part of the roll out of SAP they took the opportunity to standardise their Expense Management System by implementing SAP Travel Management (TM).

SABMiller decided to undertake a Corporate Pay Travel and Expense (T&E) Card programme across 14 markets in Europe. The aim was to achieve a standardised regional card programme for it’s European team, simplify the payment process and leverage SAP TM for expense management.

The implementation

Among the many complex variables to consider during the implementation, SABMiller’s payment delivery mechanism supporting local solutions was being replaced with global files for Citi. SABMiller had time and resource constraints that Citi needed to respect as part of the corporate card implementation.

Once the commercial card program implementation got underway, rigorous testing was required which included Citi providing sample test files for analysis, this enabled SABMiller to identify and define changes needed, which were subsequently customised specifically for their use.

To encourage buy-in and traction from countries invited into the project and in preparation for the full card launch, individual country workshops and training were undertaken by SABMiller and Citi. The consultative approach enabled countries to come forward to discuss their requirements, which were included in the expanded project scope.

Capitalising on Citi’s multifunctional online application process, SABMiller was able to offer a multitude of options to suit the needs of their multiple business units across a range of countries.

By tailoring the application process to the needs of the client, providing local language communication and guides, a rapid application rate was achieved. Within


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24 hours 20% of applications had been submitted and within 7 days, this level had reached 70%.

Citi’s local currency card program offering was adopted by the majority of SABMiller’s markets. Flexibility in the engineering of the program design meant that different statement choices could be provided dependent on the needs of the business unit.

The result

By working closely with each entity, Citi and SABMiller were able to deliver significant benefits for their cardholders and internal departments. To date the T&E project has been rolled out in 10 markets with programme benefits including:

• Standardisation of the SABMiller T&E programme offering to all staff in Europe supported by consistent and robust expense policies

• Card vendor reduction and replacement of 14 disparate card programmes with one Citi programme — reducing workload for Finance teams and delivering an ongoing rebate

• Integration with SAB Millers’ SAP accounting system for expenses

• Increased automation of the expense and payment processes through integration between Citi systems and SABMiller’s SAP platform

• Scalability of the program deployment means the regional programmes using the CitiManager and CCRS

reporting tools give SABMiller the ability to centralise payment processing in a Shared Service Centre

Plans for further programme expansion are being considered to provide SABMiller entities with a Central Travel Account.

Capitalising on Citi’s multifunctional online application process, SABMiller was able to offer a multitude of options to suit the needs of their multiple business units across a range of countries.

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North America Commercial Cards Casebook

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Transcript of North America Commercial Cards Casebook