integrated payables, and strategic supplier enablement
TRANSCRIPT
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Integrated Payables, and Strategic Supplier Enablement10/23/19
Richard WalkerOperations Controller
Ray ChampProduct Management
Commercial Card
Cindy O’NeillPresident, Commercial
Payments Exchange
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Payables & Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement & Payables
Optimization
Integrated Payables, and Strategic
Supplier Enablement
Today’s Discussion
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Payables
CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Card
Solutions
✓ Distributed Cards (Plastic)
✓ Virtual Cards
✓ Reporting Tools
✓ Spend Optimization via
Supplier Enablement Cash
Management
✓ Payment Hub• Traditional Payments
• Cross-channel Fraud Monitoring
• Working Capital Management
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
• Virtual cards are outpacing all
other card products ($353B by 2022)
• Virtual Cards are expected to
surpass T&E in ‘19 and traditional
PCard in ’21
Commercial Card Types As a % of Card Spend
Shameless Plug 26% YOY in Card Payables Spend
(2018 vs. 2017)
Source: Mercator Advisory Group (October 2018)
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
RPMG Study on Electronic
Accounts Payables (EAP)
• 86% of respondents have seen
suppliers convert to Virtual Card &
ACH (vs check)
vs
• 69% of respondents have seen
suppliers stop taking Card & ACH
Supplier Acceptance is Outpacing Supplier Attrition
Source: RPMG EAP Study 2018
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
• Virtual Cards are
underpenetrated for
transactions above
$10k
Penetration of Virtual Card – By Ticket Size
Shameless Plug CFG has custom interchange rates
in place for transactions >$10k
Source: RPMG EAP Study 2018
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Global Headquarters - Boston
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Business Case
Options Available
Selection Process
Teamwork
Operationalized Processes
New Balance Success
Criteria For
Selecting and
Optimizing
a Commercial
Card Program
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Card Program Results:
• Converted 13,496 transactions to e-Payables
• Program rebate to NB: > $1 million
• Overall Process improvements within AP – Hard and soft dollars realized
Key Takeaways
• Leverage your Terms to drive acceptance
• Continuously campaign … Just ASK !!!
• Consider internal recognition program for individual employee onboarding
performance
• Utilize your banking partner to optimize the program
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Source: As reported by RPMG Research Corporation 2018 RPMG Electronic Accounts Payable (EAP) Benchmark Survey analyzing survey
responses from over 1,000 electronic accounts payable end-users. https://rpmgresearch.net/Products-View/product_id=89
73% Report Growth
$1.2T Market
Potential
Annual Growth
10.9% Average
EAP Spending
2017 2022
$127B
$89B
Expansion of Virtual Cards
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Organizational Goals
Buyer Supplier
Maximize Incentive Revenue Minimize Cost of Acceptance
Drive Efficiency by Eliminating Checks
Extend Days Paid
Outstanding (DPO)
Decrease Days Sales
Outstanding (DSO)
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Three Key Developments Must Take Hold
Providers
MUST work with Buyers
to deliver a value
proposition to Suppliers
Providers
MUST evaluate current
payment terms and
payment methods
Providers
MUST offer multiple
payment options
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Card
● Virtual Card (SIP)
● Direct (BIP/STP)
● Lodged
ACH
● ACH+ (bps)
● Standard ACH
● Dynamic
Discounting
Checks
● Full remittance
information
included
Other
● Directed
Payments
● Thresholds
● Dollar Splitting
Payment Types
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
New Balance Results
Focus on Preferred Suppliers
• 44% of decisioned suppliers enrolled
• 27% of decisioned volumeenrolled
With Value Proposition
These Numbers Will Increase!
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Citizens campaigns perform higher overall than other FI’s
Partner% Volume Decision
% Decisioned Wins
% Decisioned Win Volume
% Volume Lost
% Volume Returned
Citizens 64% 40% 28% 46% 33%
Others 57% 36% 26% 41% 40%
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
Why Better Results?
Top 25 Strategy
Stronger Value
Proposition
Negotiated Interchange
Rates
Multiple Payment Options
Directed Payments
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization
• Change the narrative: From any one settlement type, to “Payables”
• Virtual Cards are the growth engine of B2B Payables – at the expense of check
• Reality: Suppliers come and go. Good news! …… more are coming vs. going
• Have a great project team: Treasury, AP, Purchasing, Bank Partner
• Show me the money !!!!!!!!! (earned and saved)
• The best campaigns never end: Continuously refresh and attack your Vendor File
• Conduct an AP spend diagnostic, evaluating terms and payment methods
• Develop a strong Supplier value proposition
• Support multiple payment options
Things to
Remember
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CFG Payables and Virtual Card Landscape
Best Practices - A Finance Perspective
Supplier Enablement / Payables Optimization