What will drive your organization to reduce its check volume in 2015 by adopting more card payments? A new year, or any time really, is a great time to instigate positive change. The trick is quantifying your opportunity first to garner internal buy-in. This will also help you evaluate the outcome of your efforts down the road.
So, what is your B2B card payments opportunity? In a blog post last month, AOC Solutions provided a striking example showing more than $400,000 in annual benefits. It used an organization who:
- had 3,000 invoices/month, with half typically paid via check
- switched half of the check payments to a combination of P-Cards and Virtual Cards
Do the same type of exercise, filling in the card metrics and related data specific to your organization:
- process savings per P-Card transaction
- average P-Card transaction size
- average ePayables/Virtual Card transaction size, if applicable
- average rebate percentage/basis points earned
If you do not have an ePayables program today, explore how (or whether) one would round out your payment strategy. Consider the 2014 status of your check payments to build goals for 2015. What percentage of your B2B payments do checks comprise? Enlist the help of your card provider to identify the best supplier candidates to migrate away from checks.
I cannot think of any good reason to continue making checks the foundation of our payment strategies. While checks will not go away any time soon in the United States, we sure can be doing more to change to more efficient electronic payments. Make 2015 a new year other than by just changing the calendar.
As a P-Card program manager, I created an expansion plan centered on switching 10 key suppliers to card payments. This was exciting and manageable. Where I failed was in measuring the expansion results. What did we achieve in terms of additional process savings and rebates? Did we reap the expected benefits? What about the suppliers?
Even if you have, as I did, full management support to pursue expansion, which makes documenting the results less urgent, doing so can be inspiring. It might help drive similar positive change in your organization’s other offices/regions/districts. Whether you are launching or expanding a traditional P-Card program and/or Virtual Card program, a good plan—one that includes follow up activity—is important.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…