Everybody likes a good secret...if they’re in on it.
Not everybody likes a good secret that gets out, but we think that you’ll dig this one. Besides, it’s not going to have any adverse effects. That is, unless, you embrace it and realize that you status quo may not be satisfactory anymore. This is especially the case for those who lead finance organizations and who are responsible for setting the direction of their accounts payable process.
Well, we’ll reveal it here and unpack it from there.
Virtual Payments! By that we mean virtual credit card payments. This may come as a surprise to you but from an adoption standpoint in the marketplace they lag behind traditional forms of payment like checks, wires, ACH, and wampum. That being said, we don’t believe that will be the case for too long.
Virtual Payments are a massive, on-going source of recouped payment expense.
With monthly cash rebates ranging from .5%-1.5%, virtual payments represent a unique, innovative way that nearly every business can capture some measure of their spend and stash the rebates generated. Because many CFO’s are constantly looking for ways to increase their margins, this serves as a double benefit, from the perspective of the free earned cash, and the fact that their bottom-line gets padded in a new and renewable way.
Virtual payments require little process change.
Whereas other card types, such as purchase cards, require significant effort from procurement teams to deploy successfully before their benefits can be attained, virtual credit cards are a relatively simple adaptation within the existing accounts payable process. The payable is processed as you would any other invoice, and once it is ready for payment, the mechanism of the single use virtual card is invoked. The lynchpin to this approach is the vendor onboarding. Depending on your provider of the virtual credit cards, you may have to be responsible for soliciting and winning the hearts and minds of your vendors. This feat however is not for the faint of heart, and nor is it a competency for most Accounts Payable teams. As such, we recommend that you determine the vendor onboarding strategy and resources for your virtual credit card provider prior to working with them to gauge their viability in this area.
Virtual payments don’t require a long time to deploy.
As mentioned above, because there is little process change required, once your vendors are onboarded, there aren’t extraneous personnel to train within your organization to achieve a successful implementation. Additionally, because only AP personnel have to interface with the virtual payments platform, there is no on-going need to support outside departments or personnel, which can cost gobs of unforeseen time.
Virtual payments cut into your existing operational costs.
Be they hard or soft, the fact is that if you are dependent on checks or wires, you’re leaking out anywhere from $5-15 per transaction in cost. With virtual payments, whatever you convert to the new payment methodology becomes a total swing to the good for the house, also while contributing to paperless initiatives.
In conclusion, if you're not looking into virtual payments today, then you're missing the boat. Besides the obvious attraction that these can literally fund an entire AP organization through rebate generation, it's worth noting that proceeds from these initiatives can drive your traditional accounts payable automation efforts too!