1. © 2011 Financial Operations Networks LLC Powerful P-card Productivity Practices Larry Brang, CPA, APM Merck & Co., Inc. Wednesday, April 13, 2011

2. www.TheAPNetwork.com Page 2 Learning Objectives How to select the right p-card type Various applications of p-cards Basic components of an effective p-card program Controls available with various types of p-cards Visibility to spend information from p-cards Managing enrollment

3. www.TheAPNetwork.com Page 3 Select the Right P-card Type Individual p-card Ghosted/supplier p-card e-Commerce p-card Single use p-card/p-card preloaded with $ limit Virtual card Accounts payable card

4. www.TheAPNetwork.com Page 4 Various Applications of P-card Individual p-card ―Low-dollar/high-volume non-preferred supplier Ghosted/supplier p-card ―Preferred supplier contract to ensure compliance, i.e., limo services, equipment leases, etc. e-Commerce p-card ―High-volume catalog purchases ―Eliminate invoice processing Single-use p-card/p-card preloaded with $ limit ―Single high-dollar purchase or some specific project spend Virtual card ―Secure method of buyer initiated payments Accounts payable card ―Great change management tool to drive preferred method to p-card. Used as a communication vehicle and identifying end users/suppliers who should be using a p-card.

5. www.TheAPNetwork.com Page 5 Components of P-card Program Policy clearly defining the appropriate uses of p-card Process owner for p-card program Supplier engagement User enrollment/effective training Receipt retention/reconciliation process Audit guidelines Electronic uploads direct to ledger Rebate from p-card supplier Reporting 1099/1042/sales and use tax requirements

6. www.TheAPNetwork.com Page 6 Controls Available with P-cards Supplier restriction – SIC code Commodity restriction – UNSPC code Transaction limits—individual and aggregate—limit exposure Account coding – defaulting by attribute Automated methods to identify potential sales/use tax exposure Card $ limit Spend visibility and ability to analyze spending for trends, exceptions, etc. Cardholder accountability

7. www.TheAPNetwork.com Page 7 Visibility to P-card Spend P-card supplier reporting tools Data capture: ―Level 1: purchase header related ―Level 2: merchant and tax related/diversity data ―Level 3: purchase line item related Supplier aggregation/other reporting – diversity compliance Tax compliance

8. www.TheAPNetwork.com Page 8 P-card Enrollment P-card provider enrollment process and electronic workflow routing and approval Enrollment form to include necessary data requirements, such as: ―Transaction limits ―Supplier/commodity limitations ―Accounting codes to default with criteria ―Card type ―Policy attestation ―Required training ―Approvals: Program Manager, Expense Center Manager and Procurement Manager over commodity area

9. © 2011 Financial Operations Networks LLC Thank You!