This chapter contains these topics:
Your employees might use credit cards or pcards to conduct business transactions or purchase business-related goods and services. The pcard is often the preferred method of payment for Internet and point-of-sale purchases. Companies and government entities can use the JD Edwards World Purchase Card Management system (01P) to simplify the purchase and payment of goods and services their employees transact.
Benefits to your business of using the PCard Management system include:
A reduction in paper handling of purchase orders and invoices and the associated costs and inefficiencies.
Increased spending controls including the cardholders' daily, monthly, and yearly credit limit and cardholders' transaction limit.
Improved relationship with suppliers because there are no issues with late payments.
Audit trail including time and date of transactions.
Cardholder profiles for identifying unauthorized merchant purchases.
Reduction in staff out-of-pocket expenses.
Using the PCard Management system allows companies to:
Coordinate restrictions and cardholder usage with their financial institution.
Receive and process transmissions from your financial institutions for the purchases your employees make.
Receive and process statements for reconciliation purposes.
Generate transactions in the General Ledger and Accounts Payable systems to record PCard expenses and pay your financial institutions.
Track purchasing trends and supplier performance.
Monitor cardholder purchases.
Monitor cardholder usage of preferred merchants.
To use the PCard Management system to its fullest, you must understand the flexibility of the system and how your decisions affect downstream processes, such as automatic statement reconciliation.
Although statement processing and voucher generation are optional processes, JD Edwards recommends using them. By processing and reconciling statements, you ensure that you pay only for those pcard transactions that appear on a statement and that you do not prepay your financial institution unnecessarily. Similarly, by generating vouchers from the PCard system, you create an audit trail between the PCard and Accounts Payable systems.
To use all of the features of the PCard Management system, JD Edwards recommends this process flow:
Set up and control updates to merchants and cardholder information.
Receive pcard transmissions from your financial institution.
Process the pcard transmissions to the PCard system.
Verify and update G/L account allocation for PCard transactions.
Review and approve transactions for JD Edwards financial processes.
Create and post journal entries to record pcard expenses in the general ledger.
Receive statements transmitted from your financial institution.
Process statements to the PCard system.
Reconcile statements to the pcard transactions.
Create and post vouchers to pay the financial institution.
Run reports and review merchant activity online.
Purge transmissions, pcard transactions, and statements.
Work with your credit card supplier to ensure that proper security and restrictions apply to the credit cards you issue to employees. The information you store in the PCard Management system helps you manage the purchases, but it is not preventive, nor should you expect it to replace your credit card supplier's security measures.
The PCard system integrates with other JD Edwards World systems including:
You generate journal entries from PCard transactions to record the expenses associated with each purchase.
You can generate vouchers directly from the PCard system to pay your PCard provider (bank or financial institution) based on the statement they provide to you.
You can process non-stock purchase orders from the PCard system by specifying a blanket purchase order number in the Merchant Information or by entering it on the PCard transaction. You must generate vouchers using Voucher Logging to match the purchase order.
You can add inventory from the PCard transaction to the Inventory system by specifying an item number on the PCard transaction.
You can specify the fixed asset ID for the PCard transaction. When you process journal entries, the system updates the Asset ID on resulting F0911 records, which you can then post to Fixed Assets.
If the transactions you generate are reportable 1099 expenses and you track merchants you can process 1099s using either the A/P Ledger Method or G/L Method.
See the JD Edwards World 1099 Year-End Processing Guide for additional information.
You can use the Approvals Management system to approve PCard transactions instead of using the PCard system.
You must understand specific functionality so that you can make decisions about how you want to use the PCard system before you set it up. Similarly, you should decide which optional PCard processes to use.
As part of setting up the system constants, you must determine whether you want to track your merchant (supplier) purchases. If you activate the track merchants constant, you can run reports and monitor merchant activity online, which might help you negotiate a better discount on your employee purchases. Additionally, you can easily process 1099s, if necessary, for reportable expenses to the IRS. When you track merchants, the system updates the address book number of the merchant to the corresponding field in the journal entry that you generate as part of the pcard process. If you generate vouchers and you track merchants, the system uses the merchant's address book number as the supplier number on the voucher; otherwise, it uses the bank's address book number as both the supplier and payee.
Tracking merchants requires only that you set up address book and supplier master records for each merchant, and that you generate vouchers from the PCard system.
If your employees travel outside of your country and you want to record currency information, you must activate the currency option in the Purchase Card Constants to display the appropriate currency fields for tracking foreign and domestic purchase amounts. You can activate the PCard currency option even if you do not have multicurrency activated system-wide. The system does not generate journal entries or vouchers in foreign currencies, but this feature might be useful for tracking foreign purchase amounts.
The main purpose of processing statements is so that you can reconcile them to pcard transactions. The reconciliation process ensures that you pay only for purchases that are billed to you and processed by you, and that the statement accurately reflects what you have processed for that time period.
Regardless of whether you process and reconcile statements, you can generate vouchers directly from the PCard system. If you process statements, you can generate a voucher based on a statement number and date. Additionally, generating vouchers from the PCard system provides an audit trail from the voucher to the PCard transactions it pays.
You can use the Approvals Management system to approve PCard transaction instead of using the PCard system. This allows you additional security and control over PCard transactions. There are additional set up requirements for this integration. See Section 2.3, "Setting Up UDCs for Purchase Card Management" for more information. JD Edwards World also recommends that you review the Overview to Approvals Management in the JD Edwards World Technical Tools Guide for additional information about using this process.