MiDeal-Bank-of-America - MCCBOA

Michigan Community College
Association Conference
Bank of America’s Treasury Management Solutions: An
Introduction to Purchase Card and ePayables
November 7th, 2013
MiDeal Overview
Purchasing Card Overview
Works Technology
Payment Automation ePayables
Next Steps
Client Management
Client Team
William Mungai
Vice President, Client Manager
Public Sector Banking
Phone: 617.434.9679
Email: [email protected]
Christopher Brin
Vice President, Treasury Solutions Officer
Public Sector Banking
Phone: 757.884.3938
Email: [email protected]
Joseph (Joe) Kiss
Senior Vice President, Senior Client Manager
Public Sector Banking
Phone: 989.964.7821
Email: [email protected]
Kenneth (Ken) Harroun
Vice President, Treasury Solutions Officer
Public Sector Banking
Phone: 248.631.0550
Email: [email protected]
Extended Team
Nancy Cournaya
Vice President, Senior Card Account Manager
Card Account Management - Central
Phone: 312-992-6295
Email: [email protected]
Mi Deal Overview: State of Michigan Procurement
Card Services
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 2008. 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: http://www.michigan.gov/mideal.
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
Purchasing Card Overview: Replacing Check
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
•P Card spend increased nationwide 17.6% from 2007-2009
Purchasing Card: Controls and Fraud Protection
Fraud Prevention:
Manage cards in real time – at the push of a button
within Works, increase/decrease funds on card or disable
cards in real time
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
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
Bank of America was recently recognized by Javelin (an
independent research and study entity) for the 8th
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
Works Technology: Card Management and
Online Reporting at your fingertips
Purchasing Card Online Reporting Tool: Works®
 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
of credit
 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
into your ERP
and Active
Card Controls
and postapproval
monitoring for
funds and
Payment Automation:
Replacing Checks with the Bank of America Vendor Card solution,
ePayables: How does the Service Work
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 2012.
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.
•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
received and
to pay
Client ERP/AP
processes AP
Works funds
Push pay –
payment pushed
to vendor’s
ePay– vendor
charges card
Electronic vs. paper payment processes at a glance
Payment method
ePayables Payments
Record of payment
Check run file
Card run file
Payment action
Print on check per supplier ID
Dynamically fund one card number
per supplier ID
Remittance advice
Check stub with invoice
line-item detail
Email notification with invoice lineitem detail
Vendor cash received
Check deposited; funds clear in
5-7 days
Card transaction authorized; cash
transferred in 2-3 business days
Client paid cash
Cash withdrawn upon
check clearing
Bank statement paid in 30-45 days
after transaction posts
Confirmation of payment
Positive pay file
Works® exports file with posted card
transaction details
The Value of ePayables
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
▪ Improve buying power by offering your
vendors a faster, more reliable payment
Further payment automation strategy
▪ Replaces costly paper payment with lowcost electronic payments
▪ Provides vendor enrollment support
▪ More than 75,000 vendors enrolled to
accept ePayables on approved invoices
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
▪ 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 email or
▪Improve Days Sales Outstanding (DSO)
Starting a Purchasing Card or ePayables program
with Bank of America
Next Steps
•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.
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.
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