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Purchase Card Supplier Recruitment Mark Stevenson Corporate Procurement Business Development Manager.

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Presentation on theme: "Purchase Card Supplier Recruitment Mark Stevenson Corporate Procurement Business Development Manager."— Presentation transcript:

1 Purchase Card Supplier Recruitment Mark Stevenson Corporate Procurement Business Development Manager

2 Purchase Card Seminar Purchase Cards at Manchester City Council spend and growth philosophy Supplier recruitment program Start at the beginning of the relationship On-going supplier recruitment program Supplier partnership approach supplier buy-in supplier education supplier commitment by the Council

3 Purchase Cards at Manchester City Council

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7 Annual SpendTransactionsAvg Value 2000/01£ 5,000,000 16,700 £300.00 2001/02£ 21,000,000 66,000 £318.00 2002/03£ 37,000,000 98,000 £377.00 2003/04£ 45,000,000 116,000 £387.00 2004/05£ 56,000,000 136,000 £410.00 2005/06 (est)£ 70,000,000 170,000 £412.00 Number of Cardholders 1,900+ Trees Saved 376 or 4,324,000 sheets of A4 paper or 8,648 reams Largest Single Transactions £1,127,889.52, Computer Equipment (2005) £330,973.28, Office Furniture (2003) £264,081.23, Computer Equipment (2003)

8 Purchase Cards at Manchester City Council Year to date figures Spend £38,462,074.93 Transactions 99,739 Savings £1,543,385 Trees Saved 87 or 1,995 Reams of paper or 399 boxes of A4 paper October 2005 Spend £7,209,338.14 Transactions 14,224 468 suppliers

9 Millions £21,000,000£37,000,000£45,000,000£56,000,000£ 5,000,000 estimated £234,000,000 cumulative spend *projected to 2005/06 year end £164,000,000 cumulative spend £70,000,000 Purchase Cards at Manchester City Council*

10 Thousands 66,124 98,068 116,080 136,074 16,697 estimated 603,000 cumulative transactions *projected to 2005/06 year end 170,000 433,043 cumulative transactions Purchase Cards at Manchester City Council*

11 Thousands £ 927,000 £1,488,000 £1,785,000 £2,138,000 £ 208,000 £6,546,000 cumulative savings *projected to 2005/06 year end £2,687,000 estimated £9,233,000 cumulative savings Purchase Cards at Manchester City Council*

12 £1,000 - £10,000 = 33.6% £0 - £250 = 19.4% £250 - £1,000 = 19.7% £10,000 - £50,000 = 20.3% £50,000 + = 7.2% Purchase Card Transactions, by Value, 2004/05

13 £1,000 - £10,000 = 4.1% £0 - £250 = 82.7% £250 - £1,000 = 12.8% £10,000 - £50,000 = 0.3% £50,000+ = 0.0% Purchase Card Transactions, by Value and Volume, 2004/05 (136,074 transactions)

14 £1,000 - £10,000 = 3.9% Purchase Card Transactions, by Value of Items Purchased, 2004/05 (518,946 items) £0 - £250 = 78.2% £250 - £1,000 = 17.7% £10,000 - £50,000 = 0.2% £50,000+ = 0.0%

15 Test Purchase Card Spend by Department, 2004/05 Galleries and Museums Environment & Operational Services Corporate Services Hospitality and Trading Services Housing Education Leisure Services Chief Executives Children, Families, and Social Care Libraries & Theatres

16 Purchase Card Transactions by Department, 2004/05 Environment & Operational Services test Housing Corporate Services Galleries and Museums Hospitality and Trading Services Leisure Services Chief Executives Education Children, Families, & Social Care Libraries & Theatres

17 Purchase Cards at Manchester City Council What are Purchase Cards??? First and foremost they are… a payment mechanism

18 Purchase Cards at Manchester City Council Purchase Cards are used in all departments one department alone has converted nearly 65% of its transactions to Purchase Cards another department has a target of 70% supplier recruitment by end of 2005/06 Moved away from the traditional low value-high volume use use Purchase Cards whenever we can an invoice not processed = £12+ savings regardless of value

19 Supplier recruitment program

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21 Start at the beginning of the supplier relationship all new suppliers are vetted for Purchase Cards Purchase Card potential suppliers are sent an information pack Follow up with second letter if no response Existing suppliers are targeted by value and volume Departmental buy-in for supplier recruitment is crucial Invite suppliers to a Supplier Recruitment Seminar

22 Supplier recruitment program Regular supplier recruitment seminars business fair style-seminars and surgeries invite onecard capable banks and software companies so theyre in the same room as the suppliers expanding seminars this year to make them full- fledge How to do Business with Manchester City Council seminars

23 Supplier recruitment program Supplier partnership approach Getting suppliers on board is crucial talk about our savings and achievements tell suppliers how they can help us achieve more nearly £1.7 million in processing savings in 2005/06 but still £4.5 million in payment (!) costs environmental savings – will save over 150 trees in 2005/06 but we could save over 230 benefits of automated VAT reporting our staff can be more productive

24 Supplier recruitment program Supplier partnership approach Getting suppliers to buy-in to the program emphasis their savings paid in 4 business days save staff time – no invoice or payment chasing no abuse of purchasing authority reduced rogue spending = improved contract compliance = more spend potential for business growth at the Council and beyond – estimated 4,000 Purchase Card programs in the UK in 2004

25 Supplier recruitment program Supplier partnership approach Getting suppliers educated about Purchase Cards is fundamental to a Programs success How Purchase Cards work How Purchase Cards are used How they can accept Purchase Cards How you plan to drive up their spend Online Procurement Catalogue – open to any Purchase Card capable supplier but only to

26 What is a Purchase Card? MasterCard Only Summary VAT LID Order Reference Invoice Number Commodity Code Product Description Quantity Unit of Measure VAT Rate Total Amount: ex VAT Total Amount: net VAT Total VAT Amount

27 Supplier recruitment program Supplier partnership approach Getting suppliers educated about Purchase Cards is fundamental to a Programs success How Purchase Cards work How Purchase Cards are used How they can accept Purchase Cards How you plan to drive up their spend Online Procurement Catalogue – open to any Purchase Card capable supplier but only to Purchase Card capable suppliers Separate Purchase Card capable supplier database

28 Traditional Purchase to Pay Cycle Input to Accounting System Pay The Supplier Raise Requisition Line Manager Approval Submit to Purchasing Identify Supplier Raise the Purchase Order Receive the Goods Receive the Invoice 3 Way Match COST = £12 to pay each order

29 Input to Accounting System AUTO UPDATE Submit to Purchasing NOT NECESSARY Identify Supplier Raise the Purchase Order Receive the Goods Receive the Invoice NO INVOICE PRODUCED 3 Way Match NO MATCHING REQUIRED Purchase Card Cycle Pay The Supplier ALREADY PAID IN 4 DAYS Raise Requisition NOT NECESSARY Line Manager Approval NOT NECESSARY

30 Bank Sends Payment & Management Information to Manchester City Council Identify the Supplier Order the Goods by Phone/ E-mail/Online Receive the Goods Supplier Requests Payment from Bank Bank Authorises Payment Supplier Receives Payment in 4 Days Purchase Card Pay Cycle COST = £0.90 to pay each order

31 Supplier recruitment program Supplier partnership approach Getting suppliers educated about Purchase Cards is fundamental to a Programs success How Purchase Cards work How Purchase Cards are used How they can accept Purchase Cards How you plan to drive up their spend Online Procurement Catalogue – open to any Purchase Card capable supplier but only to Purchase Card capable suppliers Separate Purchase Card capable supplier database

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34 Supplier recruitment program Supplier partnership approach Getting suppliers educated about Purchase Cards is fundamental to a Programs success How Purchase Cards work How Purchase Cards are used How they can accept Purchase Cards How you plan to drive up their spend Online Procurement Catalogue – open to any Purchase Card capable supplier but only to Purchase Card capable suppliers Separate Purchase Card capable supplier database

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36 Enhanced customer relationship and the potential to win new business Potential business with Government bodies – nearly 500 programs across Local Authority and Central Government Improve your cash flow and profitability, reducing complex invoicing and collection procedures Free marketing for your company and increased customer loyalty No credit risks or abuses of purchasing authority What are the benefits to you, the supplier?

37 Supplier recruitment program Supplier partnership approach Continually target new areas of spend Replacing petty cash with Purchase Cards Replacing Corporate Cards with Purchase Cards Insurance Services and Capital Projects Card acceptance is criteria for scoring tenders visibility auditability diversity Continually review your card usage If non-usage find out why Show your suppliers your commitment to Purchase Cards

38 Supplier recruitment program Supplier partnership approach Make yourself as contactable as possible purchasecards@manchester.gov.uk Make the process as painless as possible have as much information available as possible transition period for supplier Purchase Card usage Do what you can to steer Purchase Card spend to your Purchase Card capable suppliers avoid dual billing systems reduce rogue spending

39 Mark Stevenson Corporate Procurement Business Development Manager 0161 234 3005 m.stevenson2@manchester.gov.uk


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