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Three Ways to Boost Commercial Card Success

Stephanie Dula   Jan 23, 2017      

We’ve just released our latest research report, the 2017 Electronic Payments report, and the findings show that many organizations still struggle to capitalize on many of the benefits offered by today’s ePayables tools. Commercial cards, which we use as an umbrella term for payment cards used in B2B payments, are often underutilized by organizations for a variety of reasons. While our research shows that a majority of respondents use a commercial card in some way, it also shows they use these cards on less than 25 percent of their payments. Many times, staff members are hesitant to adopt ePayables tools, or increase card spend, because they see their current processes as adequate enough to do the job. Or they are wary they won’t achieve significant ROI due to supplier resistance. We’ve pulled together three guidelines to ensure that when your organization implements or expands a commercial card initiative, you realize maximum savings and efficiency.

  1. Optimize controls and policies. Commercial cards put purchasing power directly in the hands of employees and allow them, in some cases, to bypass the PO process altogether. It’s critical to develop a plan to prevent rogue spend on the front end. There is no one-size-fits all approach to building a dedicated policy aimed to controlling commercial card spend. It will differ according to the industry and particular corporate structure of an organization. It may be that you need to set a spend threshold that will allow employees to bypass the approval process for low dollar items, or set a multi-level approval process for items in a certain category. Automated alerts and restrictions, combined with thorough communication on policy rules, help employees avoid non-compliant spend before it occurs. We’ve found that educating employees on the ‘why’ of an electronic payments initiative, as opposed to merely rolling out a new set of restrictions, is a best practice to ensure internal adoption.
  2. Maximize rebates and incentives. The ability of commercial cards to deliver rebates is among their most appealing benefits for expense managers and CFO’s but all too often, companies aren’t able to fully capitalize on it. For example, if a card program’s spend is deemed too low and cannot meet the minimums of the contracted rebate terms, the organization may not be offered monetary incentives at all. Rebates are often quite large, so it’s important to utilize cards on as many transactions as possible. Since dollar amount is the number one factor for most organizations in determining single transaction limits, the most effective ways to increase rebate capture is to adjust transaction limits.
  3. Prepare suppliers. Finally, take some steps to ensure your suppliers will comply with your carefully crafted policy. There are several methods to achieve this, depending on how aggressive you want to be in increasing and maximizing your commercial card spend. It might just be a matter of emphasizing the benefits of faster payment times greater security and accuracy. Some organizations may engage in a multi-stage phase-out program that gives suppliers the ability to gradually become accustomed to card payments. Finally, some organizations may be able to specify an electronic payment method within supplier contracts.

For more information on ensuring your commercial card policy is optimized, get the full 2017 Electronic Payments report.

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