As noted in a post last year, for some organizations, accounts payable (AP) is the biggest holdout concerning card usage, but, as we all know, their attitude can make or break a program. This is why Recharged Education was happy to hear from an AP professional, Debra Richardson, who has an appreciation for Commercial Cards. In her article below, she describes her experience and card successes. This could be the insight that you need to convince your own AP department of the value of cards.
Make AP More Efficient with Commercial Cards
by Debra R. Richardson
As with any accounts payable manager, I had my day job, making sure operations run smoothly. Then there was my other (night?) job keeping up with the latest developments in AP automation and subsequent projects. I was always very excited about both aspects of the job, especially when they resulted in a more efficient process. For me, the most satisfying result was the expansion of our Commercial Card program.
Expanding Our Commercial Card Program
My then-company already had a Commercial Card program when I joined. However, they were only using the Corporate Travel Cards and not the Purchasing Cards (P-Cards). Within the first few months I saw that branch offices had utilities and phones shut off due to no one sending the bills to the home office for processing. The branch office employees were frustrated and my AP team was frustrated with having to rush urgent payments. Everyone was asking for a better way.
I worked with the card issuer and requested P-Cards for key staff members. I was then able to set up the utilities for the branch offices to auto pay and the problem was solved. I remember the day I communicated back to my team, the branch offices and my leadership—each let out a collective sigh of relief.
Benefits of Commercial Cards in AP Vendor Maintenance
As I moved into my next position, I again looked to Commercial Cards to solve other AP issues. Here are three ways Commercial Cards were able to help me as I focused on supporting AP vendor maintenance:
Decreased Regular Vendor Records – The processing of vendor invoices and payments by Commercial Card was handled outside of the accounting/ERP system, so no vendor record needed to be set up.
Decreased One-Time Vendor Records – We were able to define large groups of one-time vendors for specific types of spend that could be paid via a Commercial Card.
Decreased IRS 1099 Forms for Reportable Vendors – For regular and one-time vendors paid with a Commercial Card, the burden for issuing 1099-MISC forms was alleviated. Not having to review, issue, then take calls from vendors regarding their annual payments was a time saver.
Preventing Duplicate Payments
A familiar concern of AP professionals is that an invoice will be paid via Commercial Card and then again through an invoice-based process conducted through AP.
Update your vendor setup process to match your Commercial Card policies. Our employees often used their Corporate Travel Card to pay for meetings and events at hotels. To ensure that a hotel was not also paid by invoice for that same event, our vendor setup process prohibited hotels to be set up as vendors. If there is no vendor record, there can be no duplicate payment by invoice.
Commercial Cards can be an effective payment solution to make your AP and vendor process more efficient, so don’t be afraid to embrace their use.
When you do, who in your company will let out a sigh of relief?
About the Author
Debra R. Richardson is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors and Aramark. For the past eight years, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across five accounting systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file. Learn more at: https://www.debrarrichardson.com/.
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Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all.