Credit cards have long been seen by many organisations as a quick, cheap and easy alternative to developing sophisticated purchasing solutions for the procurement of high volume low value items.
The challenge has always been how to cost effectively, validate and account for that expenditure.
So what are the typical problems?
Validity - Ensuring that all purchases made on the cards are valid and accurate.
Timeliness - Updating the finance systems with purchases made using credit cards.
Forecasting - Including pending transactions (commitments) in budgeting reports.
Traditionally the mechanism for dealing with these challenges would be to either manually verify, reconcile and post these records or to employ a specialist product into which the card statement files would be imported.
The manual process is very labour intensive and often results in mistakes and rework.
3rd party systems have their own challenges;
Expensive to operate - In addition to a one off implementation charge there is typically a volume based cost based on a % of card spend per annum. For large organisations this can run into tens of thousands each year.
Multiple systems - Users with access to Agresso must learn and access an additional system to carry out certain financial functions.
Complex to report on - Bringing together a complete view of transactional information for reporting purposes is very difficult as purchase card and non-purchase card data are held in different locations and databases until a ledger update is carried out
What are the key benefits of CCM?
Quick to implement - CCM can be implemented within a short timeframe, once the supplier and product rules have been designed.
Simple to Operate - Users can quickly learn how to validate their purchases using the same user interface they use for expenses and requisitions.
Integrated within Agresso - CCM is integrated within Agresso so all data is linked and consistent meaning there is no rekeying required.
Data transfers ensure accuracy – As the process of importing is controlled, the incoming data is absolutely consistent with the original transaction meaning no opportunity for data transfer corruption.
Immediate data availability - Data is available immediately upon import, allowing users to validate their purchases and managers to analyse spend and commitments more effectively.
Direct data validation - Users see and validate their own transactions on screen. Much of spend analysis maybe defaulted based on user and type of purchase which are derived from the card data.
Straightforward Valuable Business Data – Highpoint have developed a suite of reports to support the day to day management of the application, providing information for both finance and end-users. In addition the Agresso platform provides a rich toolset for additional reporting as required.
Very cost effective to run - No more expensive service payments and increased productivity for the users and administrators makes CCM very cost effective indeed.
How the Highpoint CCM Solution works
The Highpoint CCM solution is a sub-module of Purchasing and is based on upon the existing Agresso Purchase Cards solution. CCM allows organisations to import credit card transaction files, the details of which are then routed out to card holders and managers for approval for verification and coding of spend (using the Agresso workflow engine).
Once a month a direct debit is taken by the credit card company for the previous month’s spend and the verified transactions are then reconciled to this payment.The Highpoint CCM solution supports a process which allows for Line Item Detail (LID) files to be imported and made available to the verification workflow.
This rich detail allows end-users to analyze spend by account, cost centre, project/work order down to individual purchases within a single transaction.
This coupled with default analysis per cardholder and subjective codes (accounts) linked to merchant types much of the analysis is completed even before the user accesses the system.
As CCM is directly integrated to Agresso, analysis codes are vetted immediately within the application so you can be sure that whatever codes have been entered are valid and will post successfully.
Implementing CCM
CCM is available as a product licence at a fraction of the cost of either an outsourced service or a bureau package. CCM pays for itself in months through significantly reduced administration overheads, lower subscription and support charges
As the solution is seamlessly integrated, those users familiar with Agresso should require very little training. For non-Agresso users, training could be delivered in under an hour, or easily fulfilled via e-Learning.
Installation is very straight forward, the set up and configuration carried out by admin/super users who will be importing the data and generally supporting the solution will be supported by specialist support and training.
Time Lag – information is often only available weeks after the purchase was made.
Complicated to administrate - Coding analysis and user information must be extracted from Agresso and uploaded to the card management system.
Error Prone - Agresso account rules are often more sophisticated than these solutions allow which can lead to a high incidence of errors on import and subsequent support time to resolve.
Reduced control - Workflow for verification of transactions is typically limited and does not offer the sophistication available within Agresso.
Expensive - It is possible to outsource the processing of credit card statements to an external organisation; however the costs for this service can be prohibitive. On the basis of costs of 0.5% of the yearly card spend it is easy to see how quickly these costs can add up to thousands of pounds per year.