The Red Cross success story involves the company consolidating AP operations in over 600 chapter offices down to 40 regional centers.

1. Fueling up the P-card and Early
Pay Discounts
American Red Cross
Presented By: Michael Harris
Senior Director – Finance Business Support

2. The can’t miss P2P networking
event for professionals in:
• Accounts Payable
• Finance
• Procurement
• Shared Services
• Supply Chain
• IT & Treasury
innovate.paystreamadvisors.com
Speakers Include:
• William Cooper, CPO, University of
California
• June Gregg, Director of Transaction
Services, ServiceMaster
• Kim Rankel, Director of Purchase-to-Pay,
Eli Lilly and Company
• Ben Shaffer, Director of Payment Services,
PG&E

3. American Red Cross
• Mission Statement
The American Red Cross prevents and alleviates human suffering in the face of emergencies by
mobilizing the power of volunteers and the generosity of donors.
• Vision Statement
The American Red Cross, through its strong network of volunteers, donors and partners, is always
there in times of need. We aspire to turn compassion into action so that...
 all people affected by disaster across the country and around the world receive care, shelter and
hope;
 our communities are ready and prepared for disasters;
 everyone in our country has access to safe, lifesaving blood and blood products;
 all members of our armed services and their families find support and comfort whenever needed;
 in an emergency, there are always trained individuals nearby, ready to use their Red Cross skills
to save lives.

4. Shared Services Value
Consolidate
- Pick up and move
- Gain Control of Processes
- Minimal process change
- Organization identity
- Reduced platform
Standardize
- Process Change
- Quick Hits
- Service Agreements
- Continuous Improvement
- Improve Customer Service
Integrate
- Process focus
- Technology deployed
- Initial E-Commerce
- Workflow
- ERP backbone
- Web – enabled
- Balanced Scorecards
- High skilled employees
- Benchmarking
Virtual
- Customer focus
- Stand alone operation
- Relationship Mgmt.
- Information Mgmt.
- Clear business impact
- Competitive opportunity
- Integrated systems
(internal and external)
- Performance metrics
- Self service capability
Organizational change management

5. Shared Services Value
Speed
Stability
Accuracy
Reduced Cost
Improve Quality
Customer Satisfaction
Quality Service
Cost

6. ARC Historical Look Back
 High cost to process over 600,000 annual
paper invoices.
 Over 18,000 active annual external
suppliers paid via check.
 Late payments and lost discounts to
suppliers.
 High risk / Low controls.

7. Transform with P-Cards
 P-Card perception.
 Redefine the “P”. Procurement versus
Payment.
 Change of philosophy.
• Who should have a P-card?
• What is the P-Card invoice value limit?
• What about ERP purchase orders?

8. P-Card Monthly Cycle – Field
Cards
Typical Monthly P-Card Cycle
FieldOfficeBankSystemFinanceSupplier
Supplier sends
invoice to Field
Office
Approve for
payment
Pay Supplier with
P-Card
Supplier receives
payment
Supplier
processes
payment
Bank settles and
records payment
Cardholder
reconciles
payments
Cardholders
Supervisor
Approves
Reconciliation
Liaison confirms
reconciliation
Charges posted to
General Ledger
Payment made to
bank
Bank receives
payment

9. P-Card Monthly Cycle – AP
Internal Cards
Typical Monthly P-Card Cycle – Internal AP
Accounts
Payable
BankSystemFinanceSupplier
Supplier sends
invoice to Field
Office
Approve for
payment
Pay Supplier with
P-Card
Supplier receives
payment
Supplier
processes
payment
Bank settles and
records payment
Cardholder
reconciles
payments
Cardholders
Supervisor
Approves
Reconciliation
Liaison confirms
reconciliation
Charges posted to
General Ledger
Payment made to
bank
Bank receives
payment
Key invoice into
ERP
P-Card Paygroup

10. Benefits
 Reduction in paper invoices to AP.
 Increase on-time settlement with
suppliers.
 Electronic reconciliation with workflow
approval and general ledger coding.
 Reduction in ERP vendor master.
 Reduction in overall AP cost to process.
 Maximize P-Card spend

11. Challenges
 Increases ERP General Ledger
reconciliations due to differences in keyed
transactions versus P-Card settlement.
• Supplier processing fees.
• Supplier gives a discount.
• Supplier time lag in processing
transaction.

12. P-Card Spend History
P-Card Spend
0
50
100
150
200
250
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Fiscal Year
$millions
P-Card $million

13. Where we are today
 Over 10 years P-Card experience.
 6800+ number of P-Cards issued to staff.
 500,000 annual P-Card transactions.
 Use of ghost cards for central travel
booking.
 Online reconciliation system.
 Multi-million dollar annual rebates.
 Reduced ERP suppliers down to 6,500.

14. Transform Discounts
 Identify opportunities.
 80/20 spend analysis.
 Put a process in place.
 JUST ASK!
 Focus, Measure & Improve.

15. Early Payment Discounts
Early Payment Discounts
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Fiscal Year
Dollars
Taken
Lost

16. Early Payment Discounts
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Percentage
Taken
FY01 FY03 FY05 FY07 FY09 FY11
Fiscal Year
Percentage Taken
Percentage Taken

17. New Challenges
 Bringing in payables for over 600
Chapters.
 Circa 500,000 annual paper invoices.
 Rolling out standard processes and
improved controls to non-standard
operating units.

18. Looking Forward
 Electronic P2P System implemented.
 Scanning & Workflow Technology.
 Virtual Cards.
 Convert from P-Card to ACH with early
payment discount.

19. American Red Cross – Accounts Payable Motto.
More Money For The Mission!
Thank You!
Q & A

20. The can’t miss P2P networking
event for professionals in:
• Accounts Payable
• Finance
• Procurement
• Shared Services
• Supply Chain
• IT & Treasury
innovate.paystreamadvisors.com
Speakers Include:
• William Cooper, CPO, University of
California
• June Gregg, Director of Transaction
Services, ServiceMaster
• Kim Rankel, Director of Purchase-to-Pay,
Eli Lilly and Company
• Ben Shaffer, Director of Payment Services,
PG&E