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Treasury and Trade Solutions | Citi Commercial Cards

2018 State of Texas Conference

Houston

October 2-3, 2018

University of Houston Hilton

4800 Calhoun Rd

Houston, TX 77004

Dallas

October 16-17, 2018

Doubletree by Hilton Hotel Dallas

Campbell Centre

8250 N. Central Expressway

Dallas, TX 75206

Austin

October 30-31, 2018

Commons Learning Center

J.J. Pickle Research Campus

10100 Burnet Road, Bldg. 137

Austin, TX 78758

Program Optimization: Build Out Your Program

What are other programs doing?

A “Best Practice” Model

1. Maximize

Cardholders

3. Mandate Card Usage

4. Communicate Policy

& Program

5. Integrate & Automate

Best Practice

Percentage of employees receiving Cards is 2x

greater for Best Practice organizations

92% of Best Practice organizations use

card accounts to pay for spend

78% of Best Practice organizations

mandate card usage to capture more

spend and increased discounts

Training is utilized by 82% of

Best Practice organizations

78% of Best Practice

organizations pre-populate

their data into an EMS

2. Maximize Usage

Maximize use of Cards with employees through mandating use, communicating policies, and integrating expense

management providers.

Source: RPMG 2016 Travel Card Benchmarking Survey “Corporate, Federal, States/Local Entities Combined”

Agency, Higher Ed and Smartbuy Members

What are other programs doing? .

Instead of reimbursing or cutting checks for your

travelers, use a declining balance card with a set

per diem . To capture the spend and grow your

program.

Higher Ed

Using Central Billed accounts with Individual names

on cards to control and monitor spend.

Texas Clients Using Virtual Cards

• Houston Community College

• Texas Department of Transportation

• Texas AM College Station

• Brazos River Water Authority

Are using Boost to put AT&T spend on card

School Districts in Texas

Are providing cardholders with an envelope for

receipts and they are placing their tax exempt letters

in the envelope.

Agency, Higher Ed and Smartbuy Members

Expansion of Hierarchy for better card and

reporting control.

Agency, Higher Ed and Smartbuy Members

Agency, Higher Ed and Smartbuy Members

• Using Amazon business to capture e-spend.

• Ghost Card with Uber business.

• Running merchant match with Citi and Master

Card to see which vendors except card.

Agency, Higher Ed and Smartbuy Members

Are utilizing Citi reports to integrate with

there accounting and ERP systems.

P-Card Best Practices*

*National Association of Purchasing Card Professionals

1. Program Strategy: • We recommend purchasing card team be comprised of purchasing, accounts payable, accounts receivable,

internal audit, tax, and treasury, and assign a dedicated program manager

• Develop the business case — the reason for a purchasing card program and what it can help the company

accomplish

• Senior Management support is crucial

2. Program Foundation: • Establish program goals and objectives that are clearly defined and effectively communicated

• Identify appropriate suppliers and solicit their acceptance of the program

3. Program Design: • Define your purchasing card policy

• Identify key controls, but also be aware that increasing restrictions can potentially discourage employee

usage

• Determine the electronic processes for the program

• Establish a required training program for all employees, as well as a marketing strategy to promote the

program and its attributes

4. Relationship Management: • Develop an on-going supplier management process, as they are a key component to the program’s success

• Develop partnerships with accounts payable, purchasing, and the card issuer

5. Program Process Improvements: • Communication and education efforts should be ongoing

• Review program performance

Travel Card Best Practices

Source: RPMG 2016 Travel Card Benchmarking Survey “Corporate, Federal, States/Local Entities Combined”

Program Fundamentals:

• Invest in travel expense management software

• Use mobile technology to support travel management and expense reporting process

• Invest in travel receipt documentation archival technology

• Integrate expense report reimbursement with electronic payment system

• Identify and monitor key performance measure(s) of the travel expense management process

• Provide training to

cardholders and spend-

approving officials

• Ongoing review and

investigation of unusual

transactions

• Periodic evaluation of the

adequacy of key program

controls

• Use data mining to explore

program potential and

control cardholder behavior

• Goal to fully integrate card spending data into expense reporting, expense management, and ERP/accounting systems

• Expand card distribution to a level that meets the needs of employees not only regularly traveling on business, but also those of less frequent travelers

• Mandate use of organizational travel card for business travel expenses (with a recognized penalty for non-compliance)

• Maintain ongoing communications with cardholders

Optimization

What is Optimization?

Process Automation

Automated Audit and Compliance

Increased Cost Savings

Capturing a majority of low

value spend

Increased Spend and Digital Payments

Self-Service: Maximization of

Time & Effort

What Should We Consider

Doing? Why Should We Do This? How Do We Do This?

Mandate payment by Citi

Commercial Cards for

Small

Dollar Purchases

More spend on card programs leads

to higher rebates, overall cost

savings and easier reconciliation

procedures

Require that transactions under a certain

dollar amount be paid by commercial card

(Vendor Match Analysis will show

transactions under $X limit)

Increase Card Limits Individual transaction and monthly

limits need to be in line with

employee purchasing to ensure card

utility

It is important to balance ease-of-

use and maintaining controls

Review decline reports for transactions that

have been denied due to dollar limits

Adjust card limits by MCC Category to

account for eases of use and maintaining

controls

Target Specific Spend

Categories

Choosing certain spend types to

migrate (in waves) allows us to focus

our efforts, one at a time

A consistent view of spend across a

category enhances the benefits of

supplier management and spend

visibility

Choose spend categories to migrate to

payment by card (Vendor Match Analysis

can recommend which to tackle first)

Mandate (or strongly encourage) that all

commercial card payment of these

categories

Update program policies and procedures

accordingly

Six Easy Ways to Optimize Your Card Program

What Should We Consider

Doing? Why Should We Do This? How Do We Do This?

Expand Access to Cards Companies can optimize their

card program

by issuing cards to all

appropriate staff

(e.g. accounts payable

managers,

operations managers)

Determine if the right people have the right cards

by analyzing accounts payable data to identify

frequent buyers of goods and services eligible for

card payment

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

Evaluate Slippage Sometimes only part of the total

spend with a supplier is paid by

card

This inconsistency prevents both

parties from capturing the full

benefits of payment by Citi

Commercial Cards due to

limiting process automation and

comprehensive reporting

Determine which suppliers currently paid by Citi

Commercial Cards are also being paid by other

payment methods

Publish a list of suppliers paid by Citi Commercial

Cards and mandate or encourage that all spend

with these suppliers be by commercial card

Six Easy Ways to Optimize Your Card Program Continued.

Vendor Match Analysis Requirements and Feedback

Vendor Match Analysis assists in determining where potential spend can be

identified and incorporated into your commercial card program. The optimization

is performed by analyzing the vendors paid by check (or method other than Card)

and determining those that would be a good fit for payment via commercial card.

In order to run the vendor match analysis, a one year history of vendor payments is

recommended

– Include vendor name, address, and tax ID, the more data the better the results

– Transaction count and volume per vendor

– Manner paid

– File format is in Excel

Feedback

– Top 30 merchant card acceptors by spend

– Top 30 merchant non-card acceptors by spend

– Highest spend by Merchant Category Code

Turnaround time for analysis is approximately a week to 10 days after receipt of AP

file

What is the Goal?

Citi Products: Maximizing Efficiency, Control, and Convenience

• Globally available SMS and Email

alerts, including potential fraud

notification

• Online Card Applications,

Disputes, PIN Activation, Program

Maintenance, and 24x7 call

center

• Online CitiManager Account and

Program Management

• Citi’s CLASS and Library are

available for all customers

• Pay suppliers quicker to gain early

pay discounts

• Reduce back-office reconciliation /

expense allocation

• Automate integration & management,

Reduce misuse and fraud, and ensure

compliance

Reduce / Avoid

Vendor Costs

Save

Administrative

Costs

Ensure Real-time

Communication

Enable Self-

Servicing & 24x7

Support

Support Online

Account & Program

Management

Provide Online

Education &

Training

Track, Aggregate &

Monitor Spend

Citi

Commercial

Cards

Program Optimization – Existing Clients to Grow Strategically

Overall Spend Growth

Citi can target clients that are

currently under-performing against

similar sized peers at an aggregate

program volume level with a growth

strategy.

Physical/Virtual

A key first step is to show virtual card

adoption amongst peers as EAP spend

is growing exponentially.

T&E Opportunity Drill into your T&E program

performance against peers. Citi can

provide a list of merchants peers are

engaged with in these MCCs as

compared to you.

Citi will size the under-penetrated

opportunity and convert into potential

rebate benefit.

Insights into T&E Virtual Card

accepting suppliers you may want to

consider.

B2B Opportunity Drill into your B2B program performance

against peers. Citi can provide a list of

merchants peers are engaged with in

these MCCs as compared to you.

Citi will size the under-penetrated

opportunity and convert into potential

rebate benefit.

Insights into top B2B Virtual Card

accepting suppliers you may want to

consider.

Program

Optimization

Discussion How can Citi help you help your program?

16

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