Take Your Program to the Next Level

Use newsletters, email bulletins or employee communication tools to broadcast the success and value of the program. Let participants and management know about the progress of the program against strategic goals such as transactions per month, number of cardholders and process savings. This is also a good vehicle to highlight creative uses of the Commercial Card, testimonials, new suppliers, etc. Program visibility is one the best ways to encourage program participation. Everybody, after all, wants to be on a winning team.

The more flexible and useful the Commercial Card is as a payment tool, the more it is accepted. So, think of expanding card use by allowing new applications. This could include using the Commercial Card for large-dollar items such as office equipment, or by setting up a special account with its own transaction and dollar limits for a specific supplier. This way, an individual's Commercial Card account is not affected and there is no need to adjust spending limits.

Another creative use of the Commercial Card as a payment tool is to set up 'diversion accounts.' Rather than being a special account with a single supplier, the diversion account is assigned to certain Merchant Category Codes. All purchases in these categories are diverted to one account no matter which individual cardholder does the purchasing.

The account has its own limit and is issued an individual bill at the end of the billing cycle. Also, these accounts do not effect cardholder limits and provide a tight control on spending in certain categories such as booking hotels for conferences and trade shows.

Many companies use diversion accounts for payments on airline travel. Each time an airline ticket is ordered, the purchase triggers the diversion account and the payment is 'drawn down' from that account. This allows the company to keep track of these specific types of purchases. While the employee still activates the purchase, the individual's card is not debited.

The purpose of the Commercial Card is to reduce the use of more time-consuming, more expensive purchasing tools. To achieve the most savings possible, limit or eliminate the following options:

• close the cashier desk, limit petty cash and cheque requests
• eliminate reimbursement via 'expensing' supplies
• reduce priority processing for low-value POs
• put a floor-limit on purchases through POs
• screen purchase requirements to divert purchases to Commercial Cards
• eliminate single-purpose (merchant) cards
• have accounts payable or purchasing return requests to employee if the purchase could be made with a Commercial Card

Increasing your Commercial Card supplier base makes a lot of sense but only if the right suppliers are enrolled.

Survey cardholders for suggestions about suppliers they use and prefer. As well, Purchasing will know suppliers who have proven themselves in the past and can help you recruit. Once you've added new suppliers make sure to inform cardholders.

To succeed your Commercial Card program must reach across the complete organization and be accepted as the standard payment tool for low value purchases. You want to 'mainstream' the Commercial Card into everyday operations. One way to facilitate this is to avoid the pitfall of 'Perpetual Pilots'.

'Perpetual Pilots' under-achieve and never really attain their true potential. They are usually characterized by:

• low cardholder use (less than three transactions a month)
• dollar volumes under target
• little reduction in competing options (POs, petty cash, cheque requests)

These characteristics are your clues that there's program participation, but not program acceptance, and the card program team must re-address some fundamental program elements:

• review your strategic goals and make sure they are clear to everyone involved
• increase communications with cardholders and managers, ask for feedback on problems and concerns
• reassess the participation of the program Team: are the right people and departments involved?
• increase program visibility at senior levels & use an internal champion to help
• make sure the benefits have been sold to cardholders and managers
• increase or decrease (depending on the problem) the controls that have been put in place
• sign-up more suppliers, increasing card use options
• provide further training

Then make the necessary changes to your program structure, procedures and goals and communicate the changes at all levels. Also, ask your Scotiabank Program Manager for advice on how other companies have tackled the 'Perpetual Pilot'. Make sure to give these changes a chance to work, then evaluate results again.

For more information or if you have questions, please contact your Scotiabank Program Manager or email us at commercialcard@scotiabank.com

This article is published or provided by Scotiabank to keep our customers and friends informed of new and important banking news, issues and practices. This article is not intended to provide legal, accounting or taxation advice as individual situations will differ. Prior to implementation, any practices or procedures should be discussed with your lawyer, accountant, business advisor and security consultant.