TITLE
Consider a memorandum/resolution authorizing a line of credit with BBVA Compass for the Spend Net Payables commercial card program to send electronic payments to vendors using virtual account numbers.
SUMMARY
DATE: April 18, 2017
TO: Ronald L. Olson, City Manager
FROM: Jonathan Locke, Executive Director of Finance
SUBJECT: Spend Net Payables Commercial Card Program Line of Credit
BACKGROUND AND FINDINGS:
The City’s depository bank, BBVA Compass, provides a Spend Net Payables commercial card program which is a state-of-the-art tool that uses virtual cards to deliver payments to City vendors without the need for them to log into a website. Spend Net Payables works with the City’s accounts payable system to send payments to vendors electronically with a virtual account number.
Spend Net Payables will assist the City in four areas:
1. Working capital management - Method of payment can be a crucial part of price negotiations with suppliers. Spend Net Payables will assist with optimizing cash flow, reducing transaction costs, and improving resource allocation.
2. New revenue streams - BBVA works with the City to enroll suppliers into the program to maximize rebate and savings potential.
3. Improved processes - BBVA allows the City to access meaningful information quickly while providing the flexibility and control needed to manage the payment program effectively.
4. Risk management - BBVA provides tools that offer tighter controls and increased transparency which will help the City improve compliance, streamline audits, and reduce fraud/misuse.
BBVA Compass and staff identified over $5 million in annual payments to vendors that accept commercial card payments. This amount represents only payments to vendors that exceed $5,000 per year. If these payments were made through the Spend Net Payables program, the City would have received an estimated rebate of $75,000. To get started, the City needs to establish a line of credit. BBVA Compass has agreed t...
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