Why Your Card Provider is Frustrated

September 25, 2018 Lynn Larson

Why did the Commercial Card account manager cross the road? Answer: To help their clients get to the other side. I use this version of the old chicken joke to illustrate a common hurdle for banks. They are often stuck assisting their clients with routine tasks that it leaves little time to work with them on program strategy and growth. Both parties lose out. As a former card program manager, I definitely understand frustrations that end-users might have regarding their card providers. However, I also see the other perspective. Keep reading to learn more, including action items for both providers and end-users to improve this crucial relationship.

End-user Clients

As I have asked in the past, are you a good client by taking advantage of the self-service technology offered by your provider? But it goes even deeper. If most of your time is consumed by routine tasks rather than program optimization, it is time to evaluate why and commit to a resolution. If, for example, you are constantly making temporary adjustments to limits or MCC restrictions, you should consider making permanent changes. If needy cardholders are a problem, then maybe your internal training should be revised. Look to your provider for insight.

Ask your account manager for tips on how to make your program management efforts more efficient. They typically have a keen bird’s-eye view of what could be plaguing your card program.
Be proactive about learning and using the technology available to you.

Providers

Providers want to deliver good customer service, but I will speak on their behalf by saying it needs to be worth something. If doing routine tasks for a client leads to the client growing their program, then there is some value. On the flip side are clients who can drain a provider’s resources while never getting close to realizing their program’s potential. I have to wonder whether such clients are worth retaining once the contract expires. Providers, to help clients help themselves:

Define up front the expectations of who does what, especially when/for what the client should use self-service technology.
Offer training and/or training materials on how to take full advantage of the technology features.
Suggest ways they might be able to free up some of their time for more strategic activities.

Final Thoughts

Providers can deliver valuable knowledge and support, but end-users need to be receptive. If end-users can take care of the simple things on their own, account managers can focus on helping their clients maximize the benefits of Commercial Cards. Both parties win.

Related Resource

8 Questions to Help End-users Rate Their Card Provider

Clients can deplete a provider’s resources, leaving little time to work on program strategy and growth.

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About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

When P-Cards are NOT the Best Option: A Real-life Example

August 21, 2018 Lynn Larson

Purchasing Card, Virtual Card, or other payment method? A company for which I did some consulting work was initially planning to adopt P-Cards for certain orders under $2,000. After all, this is where P-Cards traditionally excel. However, a review of the facts revealed otherwise in this case. My ultimate recommendation to them was to back away from their P-Card plan and instead consider Virtual Cards. Keep reading to see why and how this case might align with circumstances within your organization.

The Situation

The company thought it was spending too much time on low-dollar purchases. Specifically, buying departments had too many invoices to approve and, subsequently, accounts payable had too many invoices to pay. It sounded like a great P-Card opportunity until they mapped out the related purchase-to-pay (P2P) process for these orders. The purchases in question utilized an eInvoicing model for which the suppliers, in conjunction with invoice submission, electronically provided various order details requested by the company. The P2P process was quite slick. The main drawback was the invoice volume; orders under $2,000 comprised approximately 55% of the activity.

Changing to a P-Card process would have actually complicated everything, negating the benefits of P-Card usage. They had cost analyses to prove it. Ironically, the company had a separate P2P process (not their eInvoicing model) that could have benefited from P-Card adoption.

A Better Solution

In their eInvoicing model, Virtual Card payments could have helped by retaining the existing process efficiencies, but providing a secure, electronic payment option. Low-dollar invoices could be consolidated into fewer payments for AP to make and tweaks to their invoice approval process could reduce the burden on buying departments.

Key Takeaways

When contemplating a change to your payment strategy, be sure to:

specifically identify the pain points you are trying to solve
revisit your P2P requirements, as perhaps some simple tweaks could resolve the pain points
document today’s P2P process cost and what it might be after implementing a particular change
research various options before making any decisions

Every new payment strategy plan deserves another look before pursuing. You might find that a Plan B would be better.

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4 Reasons Organizations Resist Virtual Cards

July 10, 2018 Lynn Larson

There are at least four reasons why some organizations have not yet adopted Virtual Cards or, more broadly, an electronic accounts payable (EAP) solution. Do any of the following pertain to your organization? Revisit the reasons for their decision and ensure they had the right information first. You might be able to reopen the case.

1. Few Regularly Used Suppliers

A common target for Virtual Card usage is regularly used suppliers. This list might be short for some organizations, thereby a Virtual Card program may not be the best fit. For example, one end-user told me they do not use Virtual Cards because, as a research laboratory, their suppliers were always changing due to their always evolving purchasing needs. They found that traditional Purchasing Cards worked best. This is a valid reason. However, for other organizations, there are few regularly used suppliers because no one has pursued strategic sourcing. Besides not gaining the benefits of a Virtual Card program, they are potentially losing out on cost reductions that can be obtained through negotiated pricing.

2. Too Hard to Convert Suppliers

Your organization might be under the impression—without concrete evidence to support it—that your suppliers will not accept Virtual Cards. Before casting Virtual Cards and other ePayables aside, work with your current Commercial Card provider (or even a provider who is trying to gain your business) to do a “supplier match.” You might be surprised at how many of your suppliers are already accepting Virtual Card payments from other customers. In addition, many providers offer supplier on-boarding services, with or without an extra fee, to make the process easier for you. It pays to explore provider options.

3. The ERP System Cannot Support It

In response to this excuse, I have to ask, “Are you sure?” ERP systems are more robust today than ever before and include many different payment choices (or you might be able to add one). Further, you might be able to apply a default payment type by supplier. To accommodate Virtual Cards, the “payment release” step of the accounts payable process may simply generate another output. Instead of just checks and an ACH file, there would be a Virtual Card file to upload to the provider. Talk with your ERP system vendor to learn more about the capabilities.

4. Organization Resistance to Change

This is the catch-all reason that, unfortunately, often prevails above logic. If decision makers reject a sound, factual business case for Virtual Cards, then there is not a lot you can do until there is a leadership change or shift in organization priorities. Wait for the right time to bring this up again and ensure your business case includes the fraud protection aspects of Virtual Cards/EAP.

Separate the facts from the myths to ensure you are making a sound decision about Virtual Cards and other EAP solutions.