How can your agency leverage the offered payment solutions? There are many different areas of opportunity that you can explore to implement strategic payment solutions. The following are just a few examples of potential areas to review and consider that may be a practical next step in expanding your program.
Recurring Payments (Contract Payments, Rent, Utilities)
Many agencies have recurring payments for a wide variety of products or services such as payments for rent, utilities, contract payments, and much more. For example, you can use one of the offered virtual card solutions such as single use accounts, declining balance cards, or ghost cards for recurring payments.
An example of a recurring payment may be a consulting contract that your agency awarded for a five-year period. Traditionally, you make a payment against the contract through your financial accounting system. Instead, however, your agency could implement the use of a ghost card account to make a recurring monthly payment against the contract. It is important to note that the appropriate contract must be in place and the contractor must be set up to accept payments via cards.
Another example of utilization may be that your agency has recurring payments with limitations on a monthly or quarterly basis. For example, your agency may want to consider utilizing a declining balance card for payments such as transportation subsidies (similar to the HHS GO!card™).
Did you know that on average the federal government spends approximately $466 billion 1 in contract payments annually? Imagine if you moved just a portion of that spend to a GSA SmartPay strategic payment solution. Contract payments are one of the largest areas of opportunities to move payments and to greatly increase your agency’s refunds!
New Employees, Temporary Employees, Part-Time Employees
Does your agency have a unique mission that requires the use of temporary employees or a large amount of part-time employees, or frequently has an influx of new employees?
There are many agencies that fall into these types of categories. Agencies such as the Department of Defense, which constantly hires new recruits for active duty (boot camp), the Bureau of Labor and Statistics, which hires temporary employees for the census, and the Federal Emergency Management Agency (FEMA), which hires temporary employees for emergencies such as natural disaster assistance, all fall into one of these categories.
Payments to these types of employees can be an administrative burden and carry a high risk of erroneous payments and difficult oversight. What if your agency could utilize a strategic payment solution to lower those risks and streamline the payment process? The single use account (SUA) offering under the GSA SmartPay program would allow just that. SUAs allow agencies to establish one account for these employees that can include a large amount of controls such as increased Merchant Category Code (MCC) blocks and established spend limits.
Practical Use Example: The Department of Defense sends new personnel to boot camp, where trainees are provided with a voucher to cover expenses during the training time period. Instead of a voucher, trainees could be provided with SUA virtual cards to cover those expenses, which allows for spending limits, increased controls, and increased transparency into expenditures.
Supplier Retail Operations
Monthly subscription services with specific merchants are often common within the federal government. Many agencies enroll in subscriptions in order to keep up with the latest information and data within the commercial marketplace. Payments for these types of subscriptions occur regularly and frequently to a single merchant. In addition to the option of solutions such as ghost cards for these types of payments, agencies can also utilize Supplier- Initiated Payments. Supplier-Initiated Payments require that the agency and contractor bank work with the merchant to get them enrolled in the Supplier-Initiated Payments program.
Once enrolled, the merchant will initiate payment requests to the agency, and the agency will receive the request through their Electronic Access System (EAS). The merchant controls the frequency of payment initiation and transaction processing. Supplier-Initiated Payments allow for the agency to have a direct payment relationship with the merchant.
For example, a federal agency has a monthly subscription to gain access to industry data and information through a supplier such as Gartner . The agency and contractor bank work with Gartner to get the company enrolled in Supplier-Initiated Payments. Gartner initiates a payment request through the EAS to the federal agency on the 15 th calendar day of every month. The agency is able to view the information in their EAS and make a payment directly to Gartner.
Specialized or Complex Invoicing Processes
Does your agency deal with complex invoicing processes with large vendors for large dollar values? Invoicing for these types of products or services can be very complex and time- consuming. Although complex, the opportunity for increased refunds is very great, given the dollar value of these types of transactions.
Buyer-Initiated Payments may be a potential solution that allows an agency to control the frequency of payments to the vendor while simultaneously streamlining payment processes and reducing operational costs. Like Supplier-Initiated Payments, Buyer- Initiated Payments require that the agency and contractor bank work with the vendor to get them enrolled in the Buyer-Initiated Payments program. Once enrolled, your agency will be able to initiate purchasing supplies from the vendor through the EAS and will provide payment once supplies are received. The agency controls the frequency of purchases and payments to the vendor. This solution is beneficial when you have more frequent back and forth purchasing and payments to a single vendor, which may add up to a larger dollar value.
For example, federal agency that requires ongoing purchasing of lab supplies and equipment has a contractual agreement in place with a single vendor for those items. Instead of initiating a new financial document for every purchase, the agency establishes a Buyer-Initiated Payments relationship with the vendor by enrolling them in the program with the assistance of their contractor bank and their contracting office. Now the agency can initiate a request for lab supplies as frequently as needed through the EAS, receive the supplies from the vendor, and make the payment directly to the vendor through the EAS. This saves the agency and the vendor time and money by streamlining the purchasing and payment processes.