5 easy steps to effective payment optimization

“Clients who regularly revisit these steps see significant returns – up to a 30% increase in program volumes. And the U.S. Bank Optimization Services team does the heavy lifting for you.”

– Ryan Zehnder, vice president &
director of strategic enablement

Setting goals is key to making progress. It’s no different with your card program. For example, you can increase rebate revenue and reduce processing costs by paying more business expenses with virtual cards. Defining goals for growing your program can be daunting. That’s why the U.S. Bank Optimization Services team does the heavy lifting for you. We have five easy payment optimization recommendations to maximize your card program that are proven to show results.

Step 1: Update your payment terms strategy

Establishing an effective terms strategy is a powerful tool for encouraging suppliers to accept card payments. One of the key advantages your program can offer suppliers is the immediacy of virtual card payments. Simple adjustments to your established policies, like making check payments net 60, can give your suppliers a compelling reason to make the switch and create a strong foundation for ongoing payment optimization efforts. Our team can share best practices and help you work with your Treasury team to ensure that your terms align with your cash management strategy and your program objectives.

Step 2: AP file analysis

One of the best ways to identify opportunities to convert payments to virtual card is to have our expert U.S. Bank team analyze your accounts payable (AP) file. All you need to do is provide a payment register query out of your ERP system or use our AP file template. Our payments experts can complete your analysis without contacting your suppliers. We identify accepting suppliers, flag pricing discounts and measure potential program growth. Once you have reviewed and approved identified suppliers, we can conduct a supplier enablement campaign at no cost to you. We’ll work directly with your suppliers, manage all communications and streamline the transition to paying with a virtual card.

Step 3: Utilization analysis

Once you’ve completed your first AP file analysis and supplier enablement campaign, it’s important to make sure all card-accepting suppliers are enabled as such in your ERP system. To ensure every enablement step has been taken care of, we perform a utilization analysis. Essentially, it’s a way to double-check that every supplier identified and onboarded to take a virtual card payment has actually made the transition. We compare actual program spend to what was projected. Then, we look at payments to each supplier to ensure they are paid by virtual card and not the previous payment method. We’ll work directly with your AP staff to ensure everyone enrolled to receive virtual card payments is paid that way.

Step 4: Industry analysis

Next, we also conduct a broader industry analysis that compares your corporate payments to those of other organizations in the same industry. This shows if suppliers are declining virtual card payment from you while accepting from other companies in your industry. Understanding industry payment norms and benchmarking your program against peers helps ensure we maximize participation. It also provides valuable information to share within your organization to build buy-in for your program goals.

Step 5: Slippage analysis

Just like with personal goals, finding where corporate payments may be slipping through the organizational cracks is key to making the most of your program. A slippage analysis identifies suppliers being paid in multiple forms. If card-accepting suppliers are being paid via other methods, we work to shift those payments to virtual card. We also look at suppliers with multiple locations in your ERP system, and if one site is accepting card payments, we reach out to convert the rest. Our payments experts carefully review your files to ensure virtual payment opportunities aren’t missed.

Program optimization is about continuous improvement. The good news is that clients who regularly revisit these steps see significant returns – up to a 30% increase in program volumes. The U.S. Bank Optimization Services team is here to help you every step of the way.