Introduction

To stay competitive, you know how important it is to find new ways to streamline and save on your company’s operations.

Learning how leading companies handle commercial payments can give you deeper insights into where and how you can

improve. Help you understand how to run your Procure-to-Pay processes more efficiently. Enhance visibility into corporate

spend. Gain better control and compliance. And ultimately, help enable you to add more profit to your bottom line.

Visa commissioned Deloitte Consulting to conduct 90 in-depth interviews in with more than 60 global/multinational,

mid-size and large corporations as well as federal and local government agencies across the world. In 2010, Visa

commissioned Deloitte Consulting to update each of the following 28 Travel and Corporate Card Best Practices from the

comprehensive study to include current trends, updated case studies, and additional key findings. See the section entitled

“Study Methodology” for additional detail. The Visa Global Procure-to-Pay and Commercial Card Best Practices Study describes

how these organizations implement and optimize their Procure-to-Pay processes and commercial card programs. The

study gives you access to best practices for a variety of topics: Maximizing the benefits of purchasing and corporate card

programs. Streamlining travel and entertainment management. Taking advantage of the latest innovative best practices.

And automating the entire Procure-to-Pay process.

Each best practice is divided into three useful sections—a recommendation overview, a benefits outline and steps for

implementation—so you can quickly find the information you need. For more information on the Visa Global Procure-to-Pay

and Commercial Card Best Practices Study, contact your commercial banker.

Table of Contents

Establish Center-Led Management of Critical Procure-to-Pay Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Study Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Note: Survey results, research and practice recommendations are intended for informational purposes only and should not be relied upon for marketing,legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should consult with your legal counsel to determinewhat laws and regulations may apply to your specific circumstances. Visa is not responsible for your use of the information, including errors of any kind, orany assumptions or conclusions you might draw from its use. Much of the information contained in this document applies internationally, but a certainamount of information applies only to certain countries or regions. Although Visa tries to mark all country- and region-specific information with a countryindication, it does not warrant or represent that all information without indication applies internationally. You should check the applicability of anyinformation in this document to you or your organization.

Establish Center-Led Management of Critical Procure-to-Pay Functions

Determining the degree of centralization of Procure-to-Pay functions is a critical

organizational design and management decision. A company’s strategy, culture, and

organizational structure will strongly influence this decision.

A center-led management approach ensures consistency of key Procure-to-Pay

activities across the entire company, while allowing requirements and restrictions to

vary slightly based upon business unit / regional needs. Activities that often have

centralized oversight with location-specific tailoring as needed include:

• Strategic sourcing

• Contract administration

• Order placement

• Supplier payment

• Commercial card program administration

• Expense management

• Travel administration

• Control and audit

• Reporting and analysis

• Technology strategy and implementation

• Development of policies and procedures

• Communication and training

A center-led approach to Procure-to-Pay management can enable significant cost

savings eliminating any duplication of effort across business units or regions, while

maintaining local customization in areas as needed such as procurement and travel

policies, reconciliation and approval processes, and training delivery. Additionally, a

center-led approach allows for improved monitoring and control over the

Procure-To-Pay function through consolidated company spending and compliance

reports.

Many organizations achieve center-led management of Procure-to-Pay functions by

establishing a shared services organization. Shared service organizations centralize

and streamline functions across a company such as Procurement, Accounts Payable,

and Accounts Receivable. Companies are able to reduce costs by taking advantage of

economies of scale and process standardization of key Procure-to-Pay functions.

A global communications organization moved to a shared services model to eliminate

redundancies and standardize roles and processes across its Procure-to-Pay function.

Central management was able to focus individuals on specific roles, increasing

ESTABLISH CENTER-LED MANAGEMENT OF CRITICAL PROCURE-TO-PAY FUNCTIONS

Leading global companies

incorporate

representatives from

each operating region

into the center-led

management of the

Procure-to-Pay function

to ensure global

alignment.

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productivity by over 60 percent for selected tasks. Increasing the productivity and

efficiency of the Procure-to-Pay process shifted the organization’s view of the

Procure-to-Pay function from a service provider to a strategic advisor to the

organization. This also allowed resources within the Procure-to-Pay function to spend

more time with the various business units on cost savings and efficiency improvement

projects related to each business unit’s specific needs. In addition to improved

efficiency and cost savings, the shared services model increased employee satisfaction

by providing employees training and development opportunities across the various

shared services functions.

Several organizations in the study used center-led management as a platform to

outsource non-strategic Procure-to-Pay functions, such as invoice and payment

processing, increasing the ability of staff to focus on strategic initiatives, such as

supplier negotiations. One global manufacturing company outsourced the majority of

its Procure-to-Pay activities, including invoicing, payment, and reconciliation

processing in order to minimize costs and enable the Procure-to-Pay function to

become a strategic partner of the business units. As a result, the Procure-to-Pay

function was able to customize its services to assist each business with strategic

sourcing activities to achieve the company-wide goal of reducing the number of

suppliers across key spend categories.

Options for Best Practice Adoption

Best practice organizations maximize the efficiency and value of their Procure-to-Pay

function by centralizing management and control, while allowing for customization to

accommodate local market needs, and streamlining non-strategic activities.

ESTABLISH CENTER-LED MANAGEMENT OF CRITICAL PROCURE-TO-PAY FUNCTIONS

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Option I Option II Option III

Options for Adoption Establish center-led

management of the

Procure-to-Pay functions

Establish center-led

management via a shared

services organization

Establish center-led

management via

outsourcing of non-strategic

Procure-to-Pay activities

Benefits• Increases

compliance with

Procure-to-Pay

policies and

procedures

• Improves supplier

management

• Improves user

satisfaction with a

central point of

contact

• Increases cost

savings due to the

elimination of

redundancies

• Increases process

efficiencies

• Improves ability to

focus on strategic

activities in the

Procure-to-Pay

function

Key Considerations• Requires

collaboration across

Procure-to-Pay

functions to assign

roles and

responsibilities

• Requires clear

guidelines for areas

that can be

customized locally

to prevent too much

deviation for a

central standard

• May require a high

level of effort to

consolidate Procure-

to-Pay functions into

a shared services

organization

• May require time

and resource

commitment to train

third party

Benefits

Study participants report that center-led management and control of the

Procure-to-Pay function results in a number of organizational benefits.

ESTABLISH CENTER-LED MANAGEMENT OF CRITICAL PROCURE-TO-PAY FUNCTIONS

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Category Benefit Obtained

Control and Compliance Consistent development and communication of policies and procedures

provide enhanced employee compliance.

Cost Savings and Process

Efficiency

Center-led management helps eliminate redundancies and increase

process efficiencies across Procure-to-Pay functions.

Supplier Management Center-led management of the Procure-to-Pay function enables

centralized negotiations with suppliers which enhances the negotiating

strength of a company.

Implementation Steps

The development of center-led management and control of an organization’s

Procure-to-Pay function requires the following steps.

# Description of Action Step

1 Evaluate the Procure-to-Pay process to develop activities that are best managed centrally

and activities that require local customization

2 Identify and assign roles and responsibilities – both the centralized roles as well as

business unit / local office responsibilities

3 Develop and communicate policies and procedures for the center-led management

function

4 Define reporting criteria to measure the performance of the Procure-to-Pay function

centrally and locally

5 Periodically review policies and procedures and program reports and update as necessary

ESTABLISH CENTER-LED MANAGEMENT OF CRITICAL PROCURE-TO-PAY FUNCTIONS

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Study Methodology

The objective of the Visa Procure-to-Pay and Commercial Card Best Practices Study

was to better understand the changes in the segment and to gain a comprehensive

understanding of best practices across the Procure-to-Pay process and within the

commercial card program. Visa commissioned Deloitte Consulting to conduct 90

in-depth interviews in the summer of 2007 with more than 60 global/multinational,

mid-size and large corporations as well as federal and local government agencies

across the world. In 2010, Visa commissioned Deloitte Consulting to update each of

the following 28 Travel and Corporate Card Best Practices from the comprehensive

study to include current trends, updated case studies, and additional key findings. The

evaluation of the Procure-to-Pay process included sourcing, order placement, payment

and settlement, reconciliation, control and audit, and reporting activities. For the

commercial card management process, the assessment focused on practices related

to the purchasing and corporate card program strategy, management, and reporting.

Interviewees included Regional Controllers, Chief Procurement Officers, Directors of

Strategic Sourcing, Procurement Managers, Accounts Payable Managers,

Global/Regional/Local Commercial Card Program Managers and Travel Managers.

Study participants had a range of commercial card programs in place including

purchasing card, corporate card and commercial “one” card programs with each of the

top three card providers: Visa, MasterCard and/or American Express.

STUDY METHODOLOGY

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