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Michigan Community College Association Conference Bank of America’s Treasury Management Solutions: An Introduction to Purchase Card and ePayables November.

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Presentation on theme: "Michigan Community College Association Conference Bank of America’s Treasury Management Solutions: An Introduction to Purchase Card and ePayables November."— Presentation transcript:

1 Michigan Community College Association Conference Bank of America’s Treasury Management Solutions: An Introduction to Purchase Card and ePayables November 7 th, 2013

2 Agenda 2 Introductions MiDeal Overview Purchasing Card Overview Works Technology Payment Automation ePayables Next Steps Questions

3 Introductions William Mungai Vice President, Client Manager Public Sector Banking Phone: Client ManagementClient Team Christopher Brin Vice President, Treasury Solutions Officer Public Sector Banking Phone: Nancy Cournaya Vice President, Senior Card Account Manager Card Account Management - Central Phone: Client Joseph (Joe) Kiss Senior Vice President, Senior Client Manager Public Sector Banking Phone: Kenneth (Ken) Harroun Vice President, Treasury Solutions Officer Public Sector Banking Phone: Extended Team

4 Mi Deal Overview: State of Michigan Procurement Card Services

5 5 State of Michigan Procurement Card Services (Mi Deal) Bank of America is the provider for the State of Michigan Electronic Payment Card Services – Statewide Procurement Card Contract since Under the Contract, Bank of America provides purchasing card and ePayables services to municipalities and government bodies within the State as long as they are a member State of Michigan Mi Deal program and meet the program volume requirements. Purchasing Card participant volume requirement of $1,000,000 annually A current listing of approved program members is available at: Benefits of Mi Deal / State of Michigan The need to go through the RFP process is eliminated Easy enrollment No program or cardholder fees Networking and Best Practices Assigned Card Account Manager Assigned Card Account Specialist for servicing needs Works application to manage your card program Rebate rate tier determined by adding state and local government bodies

6 Purchasing Card Overview: Replacing Check Payments

7 7 Purchasing Card: Replacing Check Payments with a Card Solution Many of our government clients have embraced the electronic payment process because it provides a unique opportunity to reduce expenses and increase efficiencies. More importantly, it minimizes the risk of fraud and increases transparencies for auditors and constituents alike without changing the accounts payable processes currently in place. Purchasing cards are the quickest and easiest way to eliminate low dollar/low value transactions Purchasing Cards fit perfectly into most organization’s AP process and can drive out paper in a short amount of time The average organization has the potential to more than double the number of transactions under $2,500 that are paid by p-card and increase fourfold the number of transactions from $2,500-$10,000. Penetration in P-card spending payments has increased for office equipment, travel, computers, maintenance/repair/operations, telecommunications, printing & duplicating, media/advertising and transportation/delivery services. P Card spend increased nationwide 17.6% from

8 Purchasing Card: Controls and Fraud Protection 8 Controls: Manage cards in real time – at the push of a button within Works, increase/decrease funds on card or disable cards in real time Dispute transactions Ability to offer zero-dollar cards and declining balance cards for optimized control Enforce corporate and individual spending policies Block merchants using Merchant Category Codes (MCC) Impose single transaction limits, daily/weekly/monthly spending limits Fraud Prevention: Bank of America has instituted a number of procedures to decrease exposure to fraud including: Card PIN Activation Card Expiration Date Card Verification Value Physical Card Features Bank of America was recently recognized by Javelin (an independent research and study entity) for the 8 th straight year as ‘Best in Class’ for Fraud Detection/Prevention, Servicing, and Claims Resolutions in 2013 for our card programs. The survey was done across the top 25 card issuers Bank of America scored a 79 which was 8 points ahead of our closest competitor CitiBank The average score across all participants was 55

9 Works Technology: Card Management and Online Reporting at your fingertips

10 Purchasing Card Online Reporting Tool: Works ® 10  The most innovative web-based electronic payment solutions systems in the industry  Data can easily be integrated into accounts payable systems with 40+ standard reports including receipt imaging & management − Custom reporting by spend by vendor, department, project, grant, GL code, hierarchy, etc. − Automated 1099 reporting  Automated Reconciliation − General Ledger (GL) allocation and export for GL upload  Tools to mitigate fraud: − Real-time card controls including card issuance and suspension − Optional pre-purchase approval process − Declining balance card issuance − Merchant Category Code (MCC) restrictions and transaction limits to purchasing authority  Works® accommodates unique cardholder, manager, auditor, accountant and administrator permissions  Two years of online data retention Card maintenance and Active Card Controls Easy integration into your ERP system Spend monitoring for encumbered funds and discretionary/ incremental funds Online hierarchy management Pre-approval and post- approval workflows Real-time manipulation of credit availability Works ®

11 Payment Automation: Replacing Checks with the Bank of America Vendor Card solution, ePayables

12 Bank of America Merrill Lynch was the first to market with the solution and is the largest issuer of ePayables programs, processing more than $12 billion and 2.1 million transactions in ePayables is a complementary solution to the Purchasing card designed to further increase payment transformation from check to a card solution. In order to qualify we can perform a vendor analysis for you and provide a sample proforma of expected enrollment. The minimum requirement to participate is to have an expected vendor enrollment figure of $2 million based off of the vendor analysis. 12 ePayables: How does the Service Work Client ERP/AP System Invoice received and approved to pay Works processes AP file Works funds card ePay– vendor charges card Push pay – payment pushed to vendor’s merchant account Card processor Replace 30-40% of non-payroll AP check volume Turns a costly check into a “free” electronic payment Eliminates per-item banking fees and processing costs Optimizes your efficiency and working capital Extends float opportunity and provides cash payout incentives Requires no changes to the upfront accounts payable process Enhances transaction risk management

13 13 Electronic vs. paper payment processes at a glance Record of payment Payment action Remittance advice Vendor cash received Client paid cash Confirmation of payment Check run file Print on check per supplier ID Check stub with invoice line-item detail Check deposited; funds clear in 5-7 days Cash withdrawn upon check clearing Positive pay file Card run file Dynamically fund one card number per supplier ID notification with invoice line- item detail Card transaction authorized; cash transferred in 2-3 business days Bank statement paid in days after transaction posts Works ® exports file with posted card transaction details Payment methodCheckePayables Payments

14 The Value of ePayables BUYER BENEFITS Reduce costs and efficiencies ▪Make AP payments with no transaction fees ▪Incentive cash payouts based on spend ▪Increases float for improved cash flow Improve transaction risk management ▪Helps control card payments by only authorizing pre-approved payment amounts ▪Reduced risk of fraud through elimination of checks and cards issued with $0 credit limits ▪Improve buying power by offering your vendors a faster, more reliable payment option Further payment automation strategy ▪Replaces costly paper payment with low- cost electronic payments ▪Provides vendor enrollment support ▪More than 75,000 vendors enrolled to accept ePayables on approved invoices SUPPLIER BENEFITS Control and costs ▪Receive electronic payments without need to give bank information to customers ▪Reduced payment receipt processing cost by eliminating paper payments ▪Uses existing card technologies, processes and protections Relationship ▪Strengthens relationship with buyer while reducing the costs and risks associated with paper payments Efficiency and float ▪Remittance data transmitted electronically with payment for easy application to account ▪Funds made available on card at time of remittance (remittance can be via or fax) ▪Improve Days Sales Outstanding (DSO)

15 Starting a Purchasing Card or ePayables program with Bank of America

16 16 Next Steps Your Bank of America client team are here to help. We can help you understand what is available in the market and what fits best for your organization. Your Bank of America client team are here to help. We can help you understand what is available in the market and what fits best for your organization. Please contact your client manager or treasury solutions officer to setup a follow up discussion. Review the State of Michigan contract to see how it can help your organization earn a rebate for utilizing a Purchasing Card / ePayables program. Create a customized financial benefit analysis for your organization to see the value of converting to an electronic card solution. We are pleased to offer a one on one demonstration of our proprietary online reporting tool and card management application, Works™ for your organization.

17 17 Questions

18 18 Notice to Recipient "Bank of America Merrill Lynch" is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered as broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.FINRASIPC This document is intended for information purposes only and does not constitute a binding commitment to enter into any type of transaction or business relationship as a consequence of any information contained herein. These materials have been prepared by one or more subsidiaries of Bank of America Corporation solely for the client or potential client to whom such materials are directly addressed and delivered (the “Company”) in connection with an actual or potential business relationship and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with us. We assume no obligation to update or otherwise revise these materials, which speak as of the date of this presentation (or another date, if so noted) and are subject to change without notice. Under no circumstances may a copy of this presentation be shown, copied, transmitted or otherwise given to any person other than your authorized representatives. Products and services that may be referenced in the accompanying materials may be provided through one or more affiliates of Bank of America, N.A. We are required to obtain, verify and record certain information that identifies our clients, which information includes the name and address of the client and other information that will allow us to identify the client in accordance with the USA Patriot Act (Title III of Pub. L , as amended (signed into law October 26, 2001)) and such other laws, rules and regulations. We do not provide legal, compliance, tax or accounting advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by us to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. For more information, including terms and conditions that apply to the service(s), please contact your Bank of America Merrill Lynch representative. Investment Banking Affiliates are not banks. The securities and financial instruments sold, offered or recommended by Investment Banking Affiliates, including without limitation money market mutual funds, are not bank deposits, are not guaranteed by, and are not otherwise obligations of, any bank, thrift or other subsidiary of Bank of America Corporation (unless explicitly stated otherwise), and are not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental agency (unless explicitly stated otherwise). This document is intended for information purposes only and does not constitute investment advice or a recommendation or an offer or solicitation, and is not the basis for any contract to purchase or sell any security or other instrument, or for Investment Banking Affiliates or banking affiliates to enter into or arrange any type of transaction as a consequent of any information contained herein. With respect to investments in money market mutual funds, you should carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds. The value of investments and the income derived from them may go down as well as up and you may not get back your original investment. The level of yield may be subject to fluctuation and is not guaranteed. Changes in rates of exchange between currencies may cause the value of investments to decrease or increase. We have adopted policies and guidelines designed to preserve the independence of our research analysts. These policies prohibit employees from offering research coverage, a favorable research rating or a specific price target or offering to change a research rating or price target as consideration for or an inducement to obtain business or other compensation. Copyright 2013 Bank of America Corporation. Bank of America N.A., Member FDIC, Equal Housing Lender.


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