Powerful P-card Productivity Practices Session 11

Slide 2 ©2010 Financial Operations Networks LLC About the Speaker Larry holds the position of Director Commercial Services - America’s at Merck & Company, Inc. In his role, Larry is responsible for the Charlotte Commercial Services Team with responsibility for providing centralized transactional processing services in the areas of Procure-to-Pay, Record-to-Report, and the Billing and Accounts Receivable components of Order-to-Cash. In addition to the Charlotte team, the Procure to Pay team located in Mexico, also reports to Larry. Previously, Larry held key management positions with Schering-Plough Financial Shared Services Center and Pfizer. Larry Brang, APM Director of Commercial Services – America’s Merck & Company, Inc.

Slide 3 ©2010 Financial Operations Networks LLC 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

Slide 4 ©2010 Financial Operations Networks LLC 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

Slide 5 ©2010 Financial Operations Networks LLC 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.

Slide 6 ©2010 Financial Operations Networks LLC 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

Slide 7 ©2010 Financial Operations Networks LLC 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

Slide 8 ©2010 Financial Operations Networks LLC 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

Slide 9 ©2010 Financial Operations Networks LLC 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.

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