Many companies are implementing virtual card programs to increase the efficiency and security of their accounts payable department. But just as a chain is only as strong as its weakest link, a virtual card program is most successful if more than 50% of a company’s suppliers participate in the program.
One of the key benefits of a virtual card program is that it adds revenue to your bottom line by rebating approximately 1-1.5% of your annual AP spend. As costs rise many companies are looking to add revenue and doing so while increasing efficiency and security makes moving to a virtual card program an easy decision. Unfortunately, many of these companies are implementing virtual card programs, but are leaving a lot of money on the table by not implementing a quality supplier recruitment program at the same time.
Most companies are very comfortable with the status-quo whether they are paying by check or ACH. While it is not difficult to switch to a virtual card program, it does require the supplier’s acceptance. Many are happy to do so – but you have to ask. The good news is that you shouldn’t be the one doing the asking.
If you are considering a virtual card program, make sure to ask what the provider does to assist you in signing up your suppliers to the program. A company that specialize in this is going to be far more effective than a bank. Ask about success rates and what their process looks like. As much as you may think you will find the time to make these calls yourself, unless you are used to selling it is unlikely that calling suppliers will rise to the top of your to do list.
Many companies are very comfortable with their ACH system and may need some coaxing to change to a new system. If the vendor recruitment is done well all the benefits of a virtual card such as enhanced remittance data/speed of payments will be spelled out. That’s why as you look for companies to consider as a virtual card provider, make sure to ask about their vendor recruitment program, or lack thereof.
Lost & Found has a comprehensive outreach program to call every one of our client’s suppliers to sign them up for the program. Call us today at 800-280-8544 to learn how easy it is to turn your AP into a revenue generator.