3 Problems You Can Eliminate Using Stampli Card

Profitability is more difficult in a slowing economy. Sales are harder to generate, and companies are under pressure to reduce prices. To minimize the financial impact, evaluate all of your routine business operations, and look for opportunities to work more efficiently. 

Accounts payable (AP) is a good place to start, because a large percentage of your business transactions involve accounts payables. Credit card payments may be an area for improvement, and there are three specific problems that you can solve using automation.

Businesses can gain complete control and visibility over corporate credit card spend with the only card solution integrated into the most powerful AP Automation platform.

Credit Card Transactions: An Example

To explain these issues, assume that Superior Cabinets manufactures and sells custom cabinets to customers in Illinois, Wisconsin, and Michigan. Each customer is assigned to a Project Manager, who provides these services:

• Planning: Discusses the customer’s vision for the project, and creates images of the cabinets, based on customer comments, available materials, and labor requirements. 

• Price Approval: The manager provides a formal bid price, which must be approved by the customer. The details of each job’s costs and price are submitted to the accounting department. Every job includes installation costs, which are explained below.

• Purchasing, manufacturing: Each manager purchases wood, metal and other materials required using the manager’s company credit card. Managers supervise production of the furniture piece, and the labor costs are paid through the payroll system.

• Installation: The finished cabinets are delivered and installed by the Project Manager and one other employee. Travel expenses are paid using the same company credit card.

Here are the credit card expenses incurred to manufacture and install cabinets for the Smith family (Job #740):

Credit Card Processing: Current System 

The five project managers each use a Reliable Bank Mastercard, and the accounting department can download the month’s credit card activity two days after month end. Superior uses this system to post credit card expenses:

Supporting documentation

Each Manager is responsible for submitting expense documentation to the accounting department, along with the job number. Invoices for materials are routed to each Manager for approval, and Managers are expected to submit credit card receipts for hotels and meals. 

In some instances, the correct job is not listed on the documents, and the accounting department must email or call the manager to request any missing documentation.

Reviewing the credit card statement

Accounting reviews the credit card statement, and matches the supporting documentation with the credit card activity. As documents arrive, the accounting department scans each document and stores it online with the job cost detail supplied by each manager. 

If a particular job is missing documentation, the manager is contacted. Once the documents are received, they are matched to the credit card statement and stored online. If a credit card expense is more than 5% higher than the approved job costs, the manager must provide an explanation to the CFO. 

Recording journal entries

After all credit card expenses are assigned to a job, the accounting department uses the job cost detail to post expenses. Credit card activity is recorded in a credit card payable account, and the payable is removed when the credit card balance is paid.

Superior Cabinet’s process for credit card transactions creates a number of problems for the business.

Three Problems with the Current Process

The current process is time consuming, increases the risk of error, and makes it more difficult to close the books at month end.

1. Risk of overspending: The CFO is not alerted to overspending until after the credit card is used. Managers must provide an explanation for overspending, but not until after the fact.
2. Manual journal entries: Entering journal entries manually increases error risk and requires more staff time. All of the credit card transactions are posted when the statement is received after month end, which slows down the monthly and year-end close work.
3. Data collection: Superior does not have an automated system to request credit card documentation. The accounting staff has to determine which information is missing, and spend time calling or emailing to get documents. These steps eat up more time during the month-end close. If the job isn’t listed on the documents (or is incorrect), the process is slowed even further.

Using Stampli Card allows you to control spending, process transactions automatically, and avoid waiting until the credit card statement arrives

Improving Productivity Using Stampli Card

Stampli helps you save time, reduce errors, and get the books closed much faster. Assume that Superior Cabinets manages the Smith family credit card spending using Stampli Card:

Pre-approved spending

Management can set credit card spending limits by usage type, cardholder or vendor, in order to prevent overspending. When a customer bid is completed, the job cost detail is sent to the accounting manager, who sets card spending limits based on the costs. 

Assume that the Smith family job’s cost is budgeted at $13,000, and the manager’s card limit is set at that amount. If the manager needs to spend more than $13,000, he or she must get approval before the available credit is increased.

Instant access to transactions

Users with permissions can get access to all transactions as they occur. If the accounting department notices an unusual transaction, the credit card can be canceled or suspended until the purchase is investigated.

To illustrate, assume that Prestige Lumber supplies lumber for a large percentage of Superior Cabinets projects. A criminal gets access to a company card, and charges a transaction for Prestige Lumber Supply — a fictitious company with a similar name. The scammer attempts to send a payment to a bank account they control.

With instant access, accounting may notice the unusual transaction and call the card’s fraud department to dispute the payment and cancel (or suspend) the card. Businesses that review transactions after the statement is received have a much higher risk of fraudulent transactions.

Stampli Card will recognize spending immediately as an expense. No need to wait until month-end and determine the expense by reviewing credit card statements.

Timely accounting entries

With Stampli Card, you can post transactions as they occur, and avoid the time crunch of recording journal entries after month end. 

• When a credit card transaction is authorized and settled, Stampli creates an invoice. 

• The cardholder receives an auto-reminder for supporting documents, and an email link to the Stampli invoice. When a manager uploads documents, they are stored with the invoice.

• Stampli’s AP Automation software solution uses Artificial Intelligence technology — Billy the Bot — to automate AP invoice processing and learns an organization’s unique patterns to simplify GL-coding, automate approval notifications, and to identify duplicates.

Stampli has integrations with a number of ERP systems, and many customers sync the Stampli accounting data with the ERP system.

Don’t Just Manage Spend, Control It

To maintain profitability in a slowing economy, you need to increase efficiency and get the most out of each dollar spent. Save hours of manual work by eliminating data re-entry with Stampli’s fully integrated AP Automation. Close the books faster with all purchase details immediately available at your fingertips. Use Stampli Card to control spending, and to reduce costs.