Make P-Card Program Management Easier
As a P-Card program manager/administrator (PM/PA), you juggle a lot—perhaps even job responsibilities beyond the card program. Besides “problematic people,” what drains your time? If, despite following best practices, the majority of your time is spent on program operations (versus program strategy/growth), then something is not quite right. What can be eliminated, changed, or automated? What does not add value? See examples below. To improve efficiencies, your best bet is to have a cost-versus-benefit mindset for various activities. How much does it cost in terms of time/labor to do something? Does the time justify what the program or your organization gets out of it?
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Delinquent Cardholders or Managers
How much time do you spend chasing down cardholders or managers who are late with completing their respective transaction reconciliation/review task? You can speed up the reconciliation process and put an end to your chasing activities by utilizing default accounting/budget codes for each cardholder. Then, for the P-Card accounting process, you can push through any transactions that are not reconciled by the designated deadline. Make departments responsible for initiating any needed coding corrections; more on that below. See more ways to prevent late transaction reconciliation.
As a side note, late reconciliation is a job performance issue and should be treated as such. A lack of accountability sends a message that policies and procedures are optional, thereby weakening program controls.
Wrong Coding on Transactions
Regardless of who identifies that the accounting/budget coding on a reconciled transaction is wrong, consider the cost of correcting it. Does your organization really want to spend the time to correct every mistake? Determine the labor cost of such corrections, as well as the “cost” of taking someone’s time away from a more important task, and set a materiality threshold. For example, any card transaction under $200 with a coding mistake will not be changed. However, there might be cases, such as transactions tied to grant money, where it is necessary to correct every mistake.
Declined Transactions
Are legitimate transactions being declined? This interrupts your day and slows down the purchase-to-pay process, which is why the issue is also noted on the related page about making cards easier to use. Monitor the frequency of declines to determine whether they are sporadic or chronic. The problem could be overly restrictive merchant category code (MCC) blocks and/or spend limits. Ensure controls align with P-Card goals and targeted purchases.
Useless or Unused Reports
Are you generating and distributing reports each month that are not used for any particular purpose? Stop generating ones that do not help increase program buy-in, demonstrate program status, or support your control efforts. If you take the time to create a meaningful report, then be sure to use it. Also consider report frequency. If, for example, you create a monthly report pertaining to P-Card system access, but there are seldom any changes, decrease the frequency to quarterly.
Manually Auditing All Transactions
Despite being costly and cumbersome, manually auditing 100% of transactions has prevailed since the beginning of card payments, especially within public sector organizations. If your auditing efforts are primarily manual today:
Take the time to calculate the labor cost, based on the amount of time spent auditing and the average compensation of the employees performing the audits.
Compare the labor cost to the value and severity of issues found as a result. You might be spending hundreds or even thousands of dollars to find few issues. In addition, a human can only look at so much before getting fatigued, which means issues can easily be missed.
Explore automated auditing solutions or, at a minimum. consider using Microsoft Excel or similar to filter and sort transactions collectively versus auditing each individual cardholder statement.
Final Thoughts
Every organization will have a different appetite for risk and different goals. Some, especially those that face taxpayer scrutiny, are willing to spend more in labor costs to achieve the benefit of increased control. In cases like this, technology solutions should be pursued whenever possible to make the tasks easier and less costly, helping to strike a balance with control.
If your organization needs assistance with evaluating your program improvement opportunities, please submit a contact form. Recharged Education can help!
To improve program efficiencies, your best bet is to have a cost-versus-benefit mindset.