Solution Overview

1
EPaymentsAP Solutions

• Solution Overview
• FGFOA Conference
• 5/19/08

2
Market Overview

• 2006 CCE by Payment Type100 17.3T
• Checks are 47 of total
• Public Sector is 10 of total
• Assuming equal distribution, check volume in the
  public sector is 813 billion.

3
Public Sector Market Analysis

• Payment processes are a key area of focus
• The predominant payment method for making
  payments is check
• To get their attention the key messages are
• Cost reduction (e.g., reduction of checks/paper)
• Check writing was cited as the 1 annoyance when
  asked about payment issues
• Improved cash management processes
• When determining payment method, the elements
  that were most important were
• Cost, 67
• Ease of use, 65
• Ability to track payment, 54
• Ability to schedule payment, 50
• Automated initiation, 46
• Value of payment, 45
• Sources US Middle-Market Companies A
  Transitional Financial Services Segment, Nancy
  Atkinson, Aite Group August 2007 2004/2005 Visa
  Focus Group Results

4
Extending Purchasing Card Reach

• Individual cardholder spend
• Solves business problem of making
  point-of-purchase payments or disbursements
  (retail, COD, phone, online, travel
  entertainment etc)
• Increase control through one-time incremental
  funds approvals in addition to discretionary
  credit limit
• Manage cards through multiple card profiles based
  on intended use
• Improve visibility through permission-based
  reporting system
• Accounts Payable disbursement
• Solves business problem of optimizing payment
  type for AP disbursements
• Replace paper checks with electronic card
  payments through a parallel and analogous process
  (equal control, equal system integration)
• Little behavior change for you or your supplier
• Each of these card program types is independent
  many best practices organizations will use both
  to capture complementary benefits

5
ePayables Service Summary

• ePayables is a solution offered by Bank of
  America to assist clients with the conversion of
  their accounts payable payments from check to
  electronic card payments
• Allows you to produce a card run from your
  Accounts Payable System, similar to a traditional
  check run
• The solution can be used independent of or in
  conjunction with your current purchasing card
  program
• ePayables adds payout incentive potential up and
  beyond your current purchasing card program

6
Using Card Payments for A/P

• Direct financial benefit
• Provides no cost alternative to traditional
  fee-based payment types
• Extends float increasing cash flow
• Provides cash payout incentive paid when annual
  spend targets achieved
• Payment control benefit
• Improves transaction risk management
• Decreases fraud
• Supplier relationship benefit
• Reduces suppliers Days Sales Outstanding
• Reduces suppliers processing costs
• Liquidity planning benefit
• Improve visibility into timing of settlement to
  maximize revenue from short-term Treasury
  investments

7
ePayables Solution Process Flow
Three-way match performed on PO, receiving
document and invoice
(Optional) Paid items export file posted to ERP
system
Card run sent to Works system through FTP or XML
over HTTPS for payment of processed invoices
Available funds' balance on each card set to
amount of payment and remittance advice sent to
supplier via email or fax
Payment processed through credit card network and
matched back to original payment authorization
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Replace Checks with a No-Cost, Electronic Process
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Elements of AP FastTRACK
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ePayables Supplier Contact Service

• Target Vendor List Called
• Visa / MC / Works matched
• 50k Annual Payments

ePayables Vendors (33 - 50)

• Confirmed
• Vendor will participate

Order Cards
Approve

• Client Follow Up
• Vendor wants to discuss

Decline
Other Payment Types (50 - 66)

• Declined
• Vendor objection

Note Comments

• No Contact
• Not able to reach vendor

Client Provides New Info
11
Sample WorksMATCH Vendor Analysis
12
Sample ePayables Value Model
13
Benefits to the Supplier

• Relationship benefit
• Competitors may accept purchasing cards
• Control benefit
• Avoid giving out bank information to customers
  for ACH payments
• Avoid complications of updating bank information
  when it changes
• Cost benefit
• No per-piece check processing cost
• Efficiency benefit
• Remittance data transmitted with payment for easy
  application to account
• Funds made available on card at time of email
• No phone calls to take card number or follow-up
  on declines
• Float benefit
• 5-20 day faster receipt of funds to improve A/R

14
Bottom Line Benefits of ePayables

• Process efficiencies
• Increased rebate potential
• Cash flow optimization
• Faster vendor payment without cash flow impact
• Extend float by leveraging p-card payment terms
• Reduced check costs

15
This presentation is for informational purposes
only. It does not constitute an offer or
commitment to buy or sell or a solicitation of an
offer to buy or sell a security or any financial
instrument, or a commitment to enter into a
transaction, of the type generally described
herein. The information contained herein, and any
other communications or information provided by
Bank of America, is not intended to be, and shall
not be regarded or construed as, a recommendation
for transactions or tax or investment advice, and
Bank of America shall not be relied upon for the
same without a specific, written agreement
between us. This information is not legal advice.
You may wish to consult your own business and
legal advisor to discuss your companys business
and legal needs. Information contained in this
presentation has been obtained from sources
believed to be reliable, but its accuracy or
completeness is not guaranteed by Bank of
America. Also, certain information contained in
this presentation speaks as of the date of this
presentation (or another date, if so noted) and
is subject to change without notice. This
presentation is intended solely for your use and
under no circumstances may a copy of this
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authorized representatives.