Ask the Right Questions: What to Look for in an epayables Partner

Ask the Right Questions: What to Look for in an epayables Partner

So you re thinking about implementing a virtual credit card program (also known as epayables or virtual payments) or changing your current provider. This is the first step to a hopefully beautiful and successful new partnership, but how do you know which provider is the best fit? While we can t pick your provider for you, we can offer a few important points of consideration. In no particular order... Question 1: Do They Integrate Fully With Your ERP/ Accounting Software? You have an AP process in place and it s no fun to disrupt that flow, especially if it means you ll have to operate one process from multiple systems. Some epayables providers issue virtual credit cards through a portal. Each time you re ready to make a payment run, your staff would have to log-in to a portal, enter or upload all the payment data and generate virtual card numbers. This is obviously not ideal because it is burdensome on your staff and doesn t increase efficiency. The better option is to find a provider whose solution integrates with your existing ERP or accounting system, eliminating the need for your team to learn a new system. Take note, most epayables providers will use the term full to describe the integration with your ERP software, but full integration for one provider can mean something totally different to another. It s imperative you define what their integration capabilities are and what work will fall on your team. For example, will you have to manipulate your accounting system s data to conform to their system s files (hint, hint you shouldn t have to)? Or will your partner take your existing file specs and transform it for you? If they don t, they should. 1

Question 2: What Are Their Explanations of Rebates and Large Ticket Transactions? One of the greatest benefits of virtual credit cards are their ability to earn your organization rebates on spending, effectively turning your AP department into a revenue generator. Cha-ching! But before you start counting your rebates, there are a couple of things to consider. First off, when are your rebates paid? Many organizations only offer annual rebates that are paid up to 90 days after your contract anniversary, creating a lost opportunity to use these funds through the year. So, look for a provider that pays their rebates quarterly or even better, monthly. Additionally, make sure you know what your vendor qualifies as a large ticket purchase. Providers typically pay a lower rebate on large transactions because the interchange is lower. But there are lots of technical reasons that a transaction may or may not qualify at a lower interchange rate (i.e. the amount of data provided by the supplier, the type of vendor you re paying, etc.). Some providers will automatically pay a lower rebate on large transactions, even if the payment didn t qualify as a large-ticket purchase. We recommend looking for a provider that only reduces your rebate for qualifying transactions to make sure you earn the most rebates possible. Your provider should be able to provide transparent reporting on your transactions, the interchange rate they qualified for and the rebate paid. WE RECOMMEND LOOKING FOR A PROVIDER THAT ONLY REDUCES YOUR REBATE FOR QUALIFYING TRANSACTIONS TO MAKE SURE YOU EARN THE MOST REBATES POSSIBLE. 2

Question 3: Do They Provide a Dedicated Implementation Team? A virtual credit card provider should also be your partner, that impeccable communication you received while they were trying to win your business needs to continue far after the sales contract is signed. After all, implementation is the key to having a successful and profitable epayables program. Your vendor should be upfront about the workload involved in the implementation process, how long it will take and the labor that will be required from you and your team. For example, will the provider perform any or all of the technical work to get your program up and running, or will your IT group be required to take on the project? They should prepare you for that work and educate you on best practices for a successful program. Other implementation factors to consider are developing strategies for executive buy-in, tactics on how to communicate your new program with your vendors and provide documentation on the program. If a provider doesn t offer help in these areas, you may want to consider a different provider. 3

Question 4: Do They Have a Dedicated In-House Vendor Enrollment Team? What s a virtual credit card program without vendors who accept virtual credit cards for payment? This isn t a trick or rhetorical question, without enrolled vendors, you are left with an ineffective program. That s why it s critically important you understand who your provider will use to enroll vendors. Because believe it or not, some providers rely on the sales rep who sold you the service to do the vendor enrollment him-or herself (I know, I know). Or worse, they want you to do all the enrolling. In theory and practice, having a dedicated in-house vendor enrollment team is usually the most profitable option. An in-house team s sole purpose is to campaign your suppliers, without the distraction of other products or opportunities. They will also be more accessible and easier to work with, rather than having to go through your provider to a third-party. Additionally, in-house teams are more likely to work with you to customize the campaigns and messaging to your suppliers to ensure the language reflects the values of both you and that specific vendor. AN IN-HOUSE TEAM S SOLE PURPOSE IS TO CAMPAIGN YOUR SUPPLIERS, WITHOUT THE DISTRACTION OF OTHER PRODUCTS OR OPPORTUNITIES. 4

Question 5: What is the Process for Vendor Enrollment After the Initial Campaign? You ve clarified that they have a dedicated, in-house vendor enrollment team. Great! But how the heck are they going to actually enroll your vendors? At the onset of your program, there is typically an initial push to enroll your current vendors. Your provider is excited and ready to enroll those vendors! But wait, they are only going to target vendors that make up the top 20% of your spend file? That obviously reduces the effectiveness of your program by reducing the amount of potential spend, which in turn reduces your potential rebates. Not a good start to one of the most important aspects of your virtual credit card program. And then there is the even more important question, what happens after your initial campaign? You are going to add new vendors as your business evolves. How will they target those new vendors? A good epayables partner will have a plan in place to continually campaign your vendors throughout the life of your program, including advanced enrollment methods. And that, my friends, is the difference between a successful and very successful virtual credit card program. 40 % VENDOR TURNOVER Our research indicates that the average company has around 40% turnover of their vendors over three years. Your epayables program will decline without continuously enrolling new vendors. 5

Question 6: What Kind of Reporting Do You Receive For Your Program? Your program is in place, you re paying those vendors and now it s time to see how well your program is doing. Your vendor should be able to provide you information about your enrolled vendors, the amount of spend you ve converted and the amount of rebates you have earned. You should also look for real-time reporting capabilities and the ability to look up individual transactions by date, vendor, amount, etc. When a payment question comes up, you ll want to be able to get answers quickly and easily. Good reports should be provided on a regular basis and you should have access to them at any time. And good is always a relative term, so look for a partner who can provide benchmarking information from your peers. 6

Question 7: How Will the Provider Deliver Ongoing Support and Relationship Management? Look for a partner who isn t interested in just selling you a product they should be focused on helping you build a sustainable epayables program. Ask about the team that will be put in place to support you over the long term. How is that team organized and how are they incentivized to help you? You want consultative support to help you maximize your program. And you will also need support with day-to-day issues like reporting, credit line management, etc. Phew, that is a lot to consider, but entering a new partnership is a serious decision. What s most important is you look for a trusted, payment industry leader who offers a dedicated support team to ensure that your business succeeds with its virtual credit card program. LOOK FOR A PARTNER FOCUSED ON HELPING YOU BUILD A SUSTAINABLE EPAYABLES PROGRAM. 7

So Let s Review QUESTIONS YOU SHOULD ASK Do they integrate fully with your ERP/accounting software? What are their explanations of rebates and large ticket items? IT S IMPORTANT BECAUSE It prevents you from having to disrupt the flow of your current AP process and from having to teach your team a new system, all while saving time and money. Providers that only offer annual rebates are creating a lost opportunity for you to use these funds through the year. Providers typically pay a lower rebate on large transactions, so it s imperative you understand what does and does not qualify and how that will affect your overall rebate. Do they provide a dedicated implementation team? Implementation is the key to having a successful and profitable epayables program, and your provider should help develop strategies for executive buy-in, tactics on how to communicate your new program with your vendors and provide documentation on the program. Do they have a dedicated in-house vendor enrollment team? An in-house team s sole purpose is to campaign your suppliers, without the distraction of other products or opportunities. They are also more likely to work with you to customize the campaigns and messaging to your suppliers to ensure the language reflects the values of both you and that specific vendor. What is the process for vendor enrollment after the initial campaign? Some providers only target vendors that make up the top 20% of your spend file, which reduces the amount of potential spend, in turn reducing your potential rebates. A good epayables partner will have a plan in place to continually campaign your entire vendor list throughout the life of your program. What kind of reporting do you receive for your program? A good payments partner should be able to provide real-time reporting capabilities, benchmarking statistics and the ability to look up individual transactions by date, vendor, amount, etc. How will the provider provide ongoing support and relationship management? Your payments partner should offer consultative support to help you maximize your program as well as support with day-to-day issues like reporting, credit line management, etc. 8

About Comdata For more than 45 years, Comdata has been a leading provider of innovative B2B payment and operating technology. By combining our unique capabilities in technology development, credit card issuing, transaction processing and network ownership, we help our clients build electronic payment programs that positively impact their bottom line and operate their businesses more efficiently. We continuously evolve our products by focusing on our customer s needs to provide security, accessibility, and profitability. Comdata is part of one of the largest payment companies in the world and is the second largest commercial issuer of MasterCard in North America. Our 5,300 employees partner with companies in 53 countries to manage more than 1.9 billion fleet, corporate purchasing, payroll and healthcare transactions annually. www.comdata.com 1.800.COMDATA payments@comdata.com The Comdata MasterCard is issued by Regions Bank, pursuant to a license by MasterCard International Incorporated. MasterCard is a registered trademark of MasterCard International Incorporated. Comdata is a registered trademark of Comdata Inc. 20160921_WP_ePayables Provider