Spend Matters welcomes this guest post by Steve Pedersen, vice president and head of North American corporate credit card products at BMO Financial Group.
When it comes to accepting corporate cards as payment, many suppliers experience a “sticker shock” effect before ever taking time to look under the hood. Upon closer examination of the benefits of card acceptance, many suppliers realize that they’re signing up for a lot more horsepower than checks and wire payments alone can provide.
When understandably risk-averse suppliers spot the fees associated with corporate card transactions, accompanied by the thought of restructuring their accounts receivable departments to accept corporate cards, they often resist the change required to accept cards. By focusing on the short-term impediments to card acceptance, suppliers tend to lose sight of long-term gains, including:
- Higher order volumes from their buyers,
- Increased buyer satisfaction and
- Improved cash flow and reduced bad debts.
According to a study by MasterCard and Kaiser Associates, “Acceptance Matters — and Your Customers Agree,” 82% of buyers were more satisfied when they were able to make purchases with corporate cards.
Checks, wire transfers and ACH payments have been great options for suppliers to process payments in the past, and are still an appropriate solution for many businesses. But for increased functionality, corporate card programs may be the better solution. Businesses can eliminate the paperwork and spreadsheets that have notoriously created bottlenecks during expense reporting and get a comprehensive overview of their expenses directly within the card software program. The savings on human labor and administrative costs, bad debts and enhanced cash flows make up for any required financial investment in short order. Card programs also minimize opportunities for human error and payment delays by supplementing the payments process with an automated payment system.
Buyers are clamoring for card acceptance programs from their suppliers. While card programs may seem expensive on the surface, once suppliers get behind the wheel and take card programs for a test drive, it will be a smooth road to long-term savings.