Corp. Trades Total Liability For Rebates On One-Card

<B> Corp. Trades Total Liability For Rebates On One-Card</B>

By Lynn Woods



When Del Webb Corp. decided to replace its T&E, purchasing and fleet cards with a Paymentech one-card program, it made the unusual decision to have the corporation, rather than cardholders, assume liability for all charges, including travel and entertainment.

"We're unique," acknowledged Clint Anderson, treasury manager for the publicly traded home-building company. "We chose corporate liability for the entire program."

In return for freeing Paymentech from concerns about unpaid bills, Del Webb will receive substantial rebates, provided it pays its bills within five business days.

Anderson said the company was willing to take the plunge because of its track record of employee compliance. "Our employees are well managed, and we've had no real problems with expense reporting and card abuse," he said. "Del Webb also conducts extensive background checks on prospective employees. We pride ourselves on hiring quality people."

Del Webb began the rollout of the program on June 1, issuing 300 cards at its Phoenix headquarters. When the remaining cards are issued on July 1, the program will entail 1,500 cards with a total annual charge volume of $12 million in the first year.

Del Webb launched its first purchasing card just one year ago, but consolidating its three separate card programs onto a single piece of plastic is expected to save the company time and money, Anderson said. Among the key efficiencies is access to PaymentNet, Paymentech's Internet reporting program, which enables both managers and cardholders to access and administer card activity on Paymentech's Web site.

With PaymentNet, "we don't have to have software for different card programs loaded in PCs at 20 sites," Anderson said. Those cardholders who work out in the field and do not have computers don't pose a problem, since all belong to departments or have assistants that do.

<B><CENTER>General Ledger Link</CENTER></B>

Expense reporting information is updated daily on the Web site, and Del Webb has written the card program to automatically reconcile expenses to the general ledger system, further expediting the process. The program will seamlessly route expenses to the proper cost center as well.

"The efficiency will be tremendous once the program's up and running," Anderson said, estimating that the company will save $100,000 annually, including the Paymentech rebate.

At the same time, the conversion process has been "a major undertaking," he noted. The biggest challenge was educating people about the program and overcoming their objections to change--even though employees now are relieved of liability for T&E charges and actually have less to do in reconciling their statements. Where previously employees had to input the data from their three monthly credit cards onto a spreadsheet, under the new program they simply log onto Paymentech's Website and enter their company and individual ID numbers after they receive their single monthly statement.

After double checking that the codes accompanying the expenses on their paper statements are identical to those listed chronologically on the Web site, travelers sign off on the paper statement and hand it to their supervisors for approval. The manager then gives the paper statement to accounting, where it is filed for auditing purposes.

Anderson said the company still is using paper statements to ensure proper tracking, as well as to meet IRS requirements for receipts. However, in the future, it's conceivable that the entire process would be paperless, since expense information is being transmitted from Paymentech to the proper cost center in one seamless electronic flow.

There are a few points at which human intervention is needed to ensure an expense is routed correctly. For example, although there are two general ledger accounts for restaurant charges--food/travel and food/local--all food expenses automatically default to the food/travel category. Employees must click on the menu to change the coding to the proper account in instances where an expense qualifies as "food/local."

"We tried to set up default codes where we had the highest percentage of purchases," Anderson said.

On the plus side, Anderson said the program gives the company a lot of flexibility in terms of restricting spending. Del Webb has placed spending restrictions on all cards in high-risk categories of retailers, including casinos, pawn shops and jewelry stores.

The company also plans to restrict charges to travel vendors on cards used only for purchasing, he said. And cards used exclusively for fleet are restricted to small-dollar amounts and purchases of gas (and possibly maintenance) only.

Meanwhile, Paymentech is implementing a new purchasing card for PepsiCo. Approximately 8,000 cards, representing an estimated annual charge volume of $100 million, will be launched under the MasterCard program and utilize the PaymentNet Internet reporting system.

Paymentech reported that its commercial card charge volume grew by 159 percent year-over-year in the first quarter of this year.

The company also recently unveiled the latest release of PaymentNet. The upgraded product is faster, presents data in a more accessible format, and offers more maintenance tools online for administrators and employee cardholders, such as the ability to adjust individual credit or transaction limits. Administrators also have more control in reviewing card activity and even can block purchases at certain types of retailers.