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RBS Supplier Implementation Team
Accepting Purchasing Cards
2
Agenda
• Introductions
• Background
• Purchasing cards in general
• Accepting purchasing cards – the options
• Open Forum
3
Introductions
• Roles
• Areas of responsibility
4
Background
• Your business has been asked to accept purchasing card payments
• Accepting purchasing cards improves the delivery of MI
• You get paid promptly
• You are in control of taking payment
• You can reduce your debtors days, and improve the working capital cycle of your business
• You can use this to take payment from any debtor
• Fully approved by HMRC see:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000134&propertyType=document
5
Purchasing card – the myths dispelled
Controls
• Monthly card limits
• Individual spend limits
• Preferred Vendor (for hosted cards) can only be used with one supplier
• Merchant Category Blocking
What is a purchasing card?
• Business to business payment method
• HMRC approved VAT capture reporting/reclaim process savings/procurement Control
• Hosted Cards – one card number per supplier, per currency/GL code
6
Traditional purchasing cycle
Accounting systemupdated Supplier paid
Requisition
Approve
Raise PO
Order goodsGoods
received
Fulfillment note received
Invoice received
Three way match (PO, fulfillment
and invoice)
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Accounting systemupdated Supplier paid
Requisition
Approve
Raise PO
Order goodsGoods
received
Fulfillment note received
Invoice received
Three way match (PO, fulfillment
and invoice) XX
X
X
X
X
Purchasing cycle when using a card
Payment received in
four working days
Purchasing Cards can save
up to 85% of Procurement costs
8
Services provided
Supplier Buyer
Order
Bank
Payment in full
Authorisation Payment
Payment process
9
Levels of data transmitted within a purchasing card transaction
Level 1
Level 3
Level 2
VGIS – transmits enhanced MINo invoice as PCard data
HMRC approved
Summary detailUp to GBP5,000 – no invoice
Basic
Statement description Amount
Big O supplies GBP24.00
Statement description Net VAT Gross
Big O supplies
Stationery GBP20.00 GBP4.00 GBP24.00
Cost centre no.
Statement description Net VAT Gross
Big O supplies
Box ten black pens GBP10.00 GBP2.00 GBP12.00
Box ten red pens GBP10.00 GBP2.00 GBP12.00
Cost centre no. GBP20.00 GBP4.00 GBP24.00
Includes info such as: Unit price, VAT rateCan add: Invoice no., supplier ref. etc.
10
Example of hosted card solution
Hosted or ‘Lodge’ or ‘Virtual’ or ‘Ghost’ card
• Suitable for volume order contracts, e.g. where each supplier holds their own card and claims their money whenever an order is fulfilled
Supplier 1 Supplier 2
Supplier 3
Orders OrdersOrders
• Use one hosted card with your business
- The card can only be used with you
• Use many hosted cards with your business
• When payment needs to be made
– Orders placed as per normal
– Details captured by supplier by quoting agreed passwords, cost centres, personnel number or using suppliers’ online systems
– Agree order and cost of service
– Supplier process payment on card which is embedded
– Will quote appropriate MI with transactions to aide the cardholder to apply transaction internally and upload to GL
The card user does not need to know the card number, nor do you
Buyer
Claim ClaimClaim
11
Options for handling card payments
• Manual
– Terminal – ‘PDQ’ machines
– ‘Virtual Terminals’ – manual software
– http://www.interactivets.com/includes/procurer-online-demo.htm
– http://www.adflex.co.uk/demo/avt.htm
• Automated
– Simple – the process is driven by the invoice file
• Integrated
• Software is widely available, eg Adflex, Commidea, Interactive Transaction Solutions ( ITS ), The Logic Group, and others
http://www.visaeurope.com/en/businesses__retailers/payment_security/idoc.ashx?docid=722c1918-ee68-4283-a701-6b473c2c1cdd&version=-1
• PCI-DSS - www.pcisecuritystandards.org
12
Set-up process for automated card payment handling
Supplier creates
invoice file, in normal
way
Supplier sends file
to software company
Software company
checks file for suitability
Software company
pass transactions to
acquirer
Is file suitable/fit For purpose
Supplier uploads
small sample of live
transactions
Go live
Yes
No
Yes
No
End
Start
Software company responsibilities Supplier responsibilities
Supplier makes
changes to the file
Supplier advised
of changesto be made
Software companyadvises
supplier andthe business
Is the business
happy with data received?
13
How both parties benefit
Benefits to the card holder / buyer Benefits to you
The buyer pays their suppliers promptly, within termsSupplier gains control over obtaining the payment, by choosing when to claim
Reduce number of invoices processedPayment can be requested daily and P-card offers a guaranteed payment in four working days
Reduction in number of queries from supplier – frees up time to concentrate on more strategic, value add tasks with supplier
Cash flow is improved as no need to wait for payment to be made under invoice method
Adheres to the prompt payment directivesReduces administration (billing and collection costs) and the need to chase up lost/missing invoices
Enables your business to seek business where Purchasing Card is the preferred payment method
14
Points for further Discussion:
• You may wish to jot down your questions or issues you wish to raise
15
No representation, warranty, or assurance of any kind, express or implied, is made as to the accuracy or completeness of the information contained in this document and RBS accepts no obligation to any recipient to update or correct any information contained herein. The information in this document is published for information purposes only. Views expressed herein are not intended to be and should not be viewed as advice or as a recommendation. You should take independent advice on issues that are of concern to you. This document does not purport to be all inclusive or constitute any form of recommendation and is not to be taken as a substitute for the recipient exercising his own judgement and seeking his own advice. This document is for your private information only and does not constitute an analysis of all potentially material issues nor does it constitute an offer to buy or sell any investment. Prior to entering into any transaction, you should consider the relevance of the information contained herein to your decision given your own investment objectives, experience, financial and operational resources and any other relevant circumstances. Neither RBS nor other persons shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this communication.
The products and services described in this document may be provided by The Royal Bank of Scotland plc, The Royal Bank of Scotland N.V. or both.
The Royal Bank of Scotland plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised and regulated in the United Kingdom by the Financial Services Authority. The Royal Bank of Scotland N.V. is authorised by De Nederlandsche Bank and regulated by the Autoriteit Financiele Markten (AFM) for the conduct of business in the Netherlands.
The Royal Bank of Scotland plc is in certain jurisdictions an authorised agent of The Royal Bank of Scotland N.V. and The Royal Bank of Scotland N.V. is in certain jurisdictions an authorised agent of The Royal Bank of Scotland plc.
Copyright 2010 RBS. All rights reserved. This communication is for the use of intended recipients only and the contents may not be reproduced, redistributed, or copied in whole or in part for any purpose without RBS’s prior express consent.
James Nash – Senior Supplier Implementation Manager,T +44 (0) 20 8391 1871 | M +44 (0) 7789 9252761st Floor | 200 Bishopsgate | London EC2M 4RB | UK [email protected]
Phill Tyler – Senior Supplier Implementation Manager, T +44 (0) 7500 0283481st Floor | 280 Bishopsgate | London EC2M 4RB | UK [email protected]
