New frontiers in payments ePayables and Global Card programs Presented by:

Cynthia D. Watts Director, Senior Product Solution Specialist Manager April 24, 2014

SoCal EXPO 2014

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agenda Taking steps towards AP automation globally

What’s trending now?

Going global

Key decisions

Make your move

Taking steps towards AP automation globally

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Objectives

Effectively manage your payables

Improved AP efficiency

Increased days payable outstanding

Enhanced cash flow

Controlled financing and processing costs

Strengthened supplier relationships

SIMPLE STREAMLINED

EFFECTIVE

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Components of automated payables

How is Requisition initiated and managed within ERP system?

How are approvers approving the requisition?

How is PO created?

How is invoice processed?

How is reconciliation completed?

How is PO sent to Supplier?

How is remittance info sent to Supplier?

How is invoice received from supplier?

How are payments made to suppliers?

When are payments made to suppliers?

How is data captured and stored?

How are supporting documents captured and stored?

What reports are produced?

How are reports produced?

Internal processing External processing Payment execution Data warehousing

What’s trending now?

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Card continues to grow globally

Key areas of significant volume growth

Percentage of commercial card purchases initiated outside of the

U.S by 2015 (4.8% growth)

Total transactional value of global card purchases

43%

trillion $6.4

Sources: Capgemini “Global Trends in the Payment Card Industry: Issuers”, 2012;

+32%

Chi

na

+10.

1% B

razi

l

+18.

1% A

PAC

+7.3

% E

MEA

Card usage continues in key markets around the globe Card growth trends

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Procurement & payables card evolving

Among multi-national corporations, 37% have established purchasing card programs outside of North America. The majority of these programs are in the United Kingdom, Asia and the Asia-Pacific region.**

* MasterCard Worldwide ** RPMG Purchasing Card Benchmarking Survey Results 2010.

B2B Opportunities*

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Global purchasing card usage increasing

Global companies see value in purchase card

Sources: Glenbrook Commercial Card Sizing August 2011, EIU Forecasts October 2011.

▪ Expansion of card usage in payables ▪ Highly integrated virtual card solutions

for targeted verticals ▪ Cost effective cross-border payment solutions

14.1% Projected commercial card purchase

volume growth 2010-2015

$2.2 trillion Projected commercial card purchase

volume by 2015

Of this $2.2 trillion …

43% Outside of the U.S.

57% In the U.S.

Global trends

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Purchasing card usage increases in N.A.

Spending & savings continues to rise in North America

Annual purchasing card spending in North America

Spending

Cost savings per transaction in administrative costs when compared

to the traditional purchase-order driven acquisition process

The cost savings that purchasing card use is generating per year in

North America

$44

$74

Savings

Data from RPMG Purchasing Card Benchmarking Survey Results 2012.

billion $196 billion

2011

$212 billion

2012

$247 billion

2013

$290 billion

2014

Purchasing Card trends

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Why make the move the automated payables?

Cost savings drives electronic payment adoption

Automated payables

Fraud control

Improved cash

forecasting Cost

savings Reconcile efficiently

Improved working capital

Better supplier/ customer relations

2013 AFP Electronic Payments Survey, November 2013

The biggest barrier was the unwillingness of suppliers to accept electronic payments

Shortage of IT resources for implementation

Lack of standard format for remittance information

Lack of integration between electronic payment and accounting systems

Barriers to adoption of electronic AP solutions

Driving automation

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Payment strategy goals

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Reduce fixed costs in the payment cycle

Optimize cash flow in support of working capital

Corporate transparency and local control

Process efficiencies

Objective: A cost effective way to do business globally

Card is a key component to meeting overall payment objectives

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Examining options

Solutions for every type of spend…

These solutions work effectively together to help improve working capital

Purchasing Card

Virtual card & electronic ACH

solutions

Supply Chain Finance (SCF)

$ Working Capital Improvement $$$

Type of spend

Strategic international and domestic suppliers

Invoiced spend

Non - invoiced spend/ lower dollar

Employee programs

Benefit

DPO extension/ COGS reduction

DPO extension/ Financial incentive/ Dynamic discounting

Financial incentive/DPO Extension/reduced processing Costs/data consolidation

Control and data capture/ Financial incentive Travel Card

U.S. and Global

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Virtual Cards: The newest Card program

Extending traditional one card and purchasing card to virtual card has

dramatically increased purchase volume in just the last 2 years.

Virtual card program success depends on your ability to recruit and retain vendors. Establish a vendor value proposition and ensure vendor recruitment is integrated into the sourcing process to ensure maximum program adoption and financial benefits received.

Vendor recruitment

Begin with a known product / internal

need

Ensure Card is integrated

throughout existing business

processes

Identify solutions to address local

and regional differences

Position solutions with management

Ongoing monitoring and best practices

review

The right solution at the right time Virtual card solution evolved from more traditional travel and purchasing card program usage

Going Global

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Client-focused service and support A single point of contact for a consultative

implementation with regional and global expertise

Knowledgeable and specialized customer service for employees and client servicing for program administrators in local time zones

Strategic account management support to ensure program optimization

Robust capabilities Increased global acceptance for all employees

and cardholders

A market-specific card offering in each market

A single data management and reporting tool for all global usage

A solution provider that leads the market with client-centric innovation

Global Card programs

Key drivers expanding your Global Card program

visibility Single view into purchasing and T&E spend enterprise

and worldwide

control Ability to implement

consistent controls, common purchasing tools, and uniform

policies around the globe

optimization Realize benefits associated

with payments optimization globally

connectivity Benefit from a multi-tiered

client support team with global connectivity

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Location, location, location

Where do you do business?

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Program insights/considerations

Ways to promote global growth with regional differences ▪ Ongoing reporting and analysis at the global and regional levels ▪ Regular communications between program offices ▪ Integration w/ sourcing to identify new vendors ▪ Accountability to performance goals

Language expectations Local customs

Card Security Purchase Card Central Travel Cultural/ regional

nuances

Chip and PIN Chip and Signature Magnetic Stripe Only

Central travel accounts Business Travel

Accounts

Usage by region / country Data available Virtual card options

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Think globally, implement locally

Common framework for program development and deployment meets local needs and ensures global accountability.

Design

Identify potential vendor targets for Pcard v. ePayables

Implement

Vendor enrollment call campaign for

ePayables

Expand

Ongoing vendor identification campaigns;

sourcing integration

Project roadmap for deploying a multi-solution/multi-region EAP solution

Key decisions

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Define success

Approach Global mandate use of card and

mandated global expense policy across organization, unless government laws prohibit/risk Align with move to shared service

centers Realize cost saving from card roll

out in countries as a back office process improvement project to harmonize systems

Get cards deployed and spend on cards – time driven

Capturing global spend and data to a centralized tool

Process efficiency - moving low dollar non recurring spend to card

Leveraging discounts with travel vendors globally

Cost saving

Realize higher card acceptance compared to current issuer

Alignment with organizational change

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Measure success

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Metrics to consider…

▪ Spend, Transaction Volume, Ave. Ticket, ▪ Monthly reporting – minimum ▪ Performance by region / business office ▪ Consider other metrics such as vendor

enrollment, # active vendor accounts

Monitoring local, regional, and global contributions Promote centralized reporting and regular communications Between local program management teams

Set a growth target for the portfolio – spend, rebate, etc.

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Best practice recommendations

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Ensure that company policies are enforced in regards to T&E and purchasing.

Global data will be provided on card spend

Use the implementation as an opportunity to ‘open the hood’ and identify best practice

Engage regional stakeholders early and determine what input you need from them

Allow sufficient time to migrate before serving notice to your existing provider

Consider your internal communication requirements from the outset

Assign a clear project lead to assist with comms and stakeholder management

Engage in an early and detailed dialogue with your project manager

Focus on the overall benefits for the program not just on the rebate potential

Let us help you to understand regional differences

Make your move

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Summary

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Expert team Global project managers and local

teams Dedicated and experienced Understand global markets Best practice guidance

Best in class tools Global Reporting and Account

Management Tool Across all markets Global and local reporting Integration with ERPs, expense

management solution and HR systems

Range of support materials Implementation guides Regional/country program guides Questionnaires for use with regions Cardholder communications Project plans GANTT charts Executive updates Activation reporting PA training and train the trainer materials Global Reporting Tool training and FAQs Payments guides Insurance and emergency guides

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Q&A Partnering for success

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