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Five best practices for driving commercial card acceptance
A commercial card program for B2B payments is a win/win solution for buyers and suppliers, helping both parties save time and money. Here’s how to encourage supplier acceptance of card payments.
A commercial card program for business-to-business (B2B) payments—using either traditional plastic cards or virtual cards—can offer enormous advantages for both buyers and suppliers. It’s a win/win solution in which suppliers get paid faster, buyers enjoy rebates and everyone benefits from stronger security and built-in digital efficiencies.
A thoughtful recruitment effort can alleviate the challenges that many organizations encounter when moving to card payments and help encourage supplier acceptance. Here are five critical components of an effective supplier recruitment strategy.
1. Set realistic supplier adoption goals
Developing realistic goals around supplier adoption helps you focus valuable resources on the best-fit suppliers. Create a list of criteria for deciding which suppliers to pay via card, based on who is most likely to accept. Focus on things like:
- Annual spend
- Average transaction size
- Payment terms
- The strength of your relationship with the supplier
One method for encouraging adoption is to get help from your commercial card provider, who should be able to deliver expertise and use data to identify your best supplier targets. The card issuer can conduct the analysis on your behalf and recommend an optimized payments strategy that reduces paper-based processes and returns the most value from the supplier recruitment efforts.
2. Educate internal and external stakeholders
Your supplier adoption strategy can’t be conducted in a vacuum. Suppliers may reach out to your staff with questions, so individuals across accounts payable, procurement and front-line buyers need to be knowledgeable and able to articulate the value of acceptance and how the supplier can participate. Having a vocal executive sponsor to champion your card program, both internally and with suppliers, is also key to success.
Your provider should equip your company with talking points, resources and best practices to answer key questions or concerns about your program.
3. Make supplier expectations clear
Give suppliers a clear understanding of your expectations, the benefits and incentives for adoption. For new contracts or existing contracts that are up for renewal, add early-payment term incentives for card acceptance. Because faster payment creates direct value on your supplier’s balance sheet, offering payment upon order for card payments (or for virtual card payments, net immediate upon invoice approval) creates a strong incentive to adopt.
As you onboard new suppliers, expectations for card acceptance can be detailed in RFPs/RFQs.
For ongoing program acceptance, insist on card as the preferred payment method and be sure not to offer accelerated payment terms for other forms.
4. Ensure suppliers see the value of card acceptance
Suppliers need to see value to take card payments, so make it straightforward and simple to accept. Pay suppliers on time and keep your payment term commitments; provide as much remittance detail as possible to make it easy for suppliers to reconcile payments; and offer multiple channels (phone, web, email, etc.) to make payments based on your suppliers’ preferences. Perhaps most important, ensure all your stakeholders are prepared to discuss benefits and details, should suppliers raise questions.
The right provider will also make it easier to accept card payments. Suppliers will appreciate being able to support payment processing with online tools (rather than a point-of-sale terminal) and receive payment information via an online portal or mobile app.
5. Continuously educate new and existing suppliers
As more businesses opt to digitize their payments, the number of suppliers accepting commercial cards is likely to continue increasing. This is why you should revisit any suppliers that may have initially declined to accept card payments. Organizations that persistently educate and encourage their suppliers may achieve greater acceptance and capture more spend. If it has been more than a year, ask your provider to repeat their analysis to ensure you are identifying and pursuing every opportunity.
Driving commercial card acceptance
These five best practices of an effective adoption strategy are important for any buyer implementing a commercial card program. J.P. Morgan offers innovative, technology-forward solutions that are backed by our Supplier Experience team, whose goal is to help clients with critical insights, best practices and resources that can facilitate and enhance an educational effort and also provide ongoing supplier support for our clients’ programs. Effort spent on supplier recruitment will likely bring significant return on investment, especially if a sound strategy and best practices are followed. Transitioning your organization’s spend to card payments will ultimately help both buyers and suppliers.
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