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Adapting a Consumer Payment Program to Fit Commercial Requirements


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In a billing and payment program, the mystery of how to maximize B2B profitability is often a simple question of functionality. This paper addresses the common pitfalls of a consumer payment program that hinder commercial growth and goes on to identify value opportunities that can make B2B relationships more profitable

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Adapting a Consumer Payment Program to Fit Commercial Requirements

  1. 1. Adapting your Consumer Payment Program to Commercial Requirements
  2. 2. A Question of Functionality © MULTI SERVICE Corporation 2010 <ul><li>When developing billing and payment programs, retailers research consumer profiles, credit needs, appropriate incentive structures, and value propositions. </li></ul><ul><li>The question of maximizing B2B profitability is a simple question of functionality: </li></ul><ul><ul><li>How easy do you make it to do business with you? </li></ul></ul><ul><ul><li>How does this relationship make your customers more profitable? </li></ul></ul><ul><ul><li>How will your program make your own company more profitable? </li></ul></ul><ul><li>This presentation addresses common pitfalls of a consumer payment program that hinder commercial portfolio growth and also identifies value opportunities that will make B2B relationships more profitable. </li></ul>
  3. 3. A survey of more than 2,000 credit professionals identified “slow pay or delinquencies” among their top business concerns for year 2010.1 With commercial customers, though, a past-due payment is not usually the result of an inability to pay. Often delinquent payments are caused by the customer’s individual data requirements for processing the invoice in question. Many companies, for instance, cannot release payment without an appropriate purchase order number, authorization number, or the cost center associated with the transaction. Your Days-Sales-Outstanding (DSO) is unforgiving, but attempts to improve it only strain customer relationships. Difficulty collecting payments from commercial customers may be caused by consumer-targeted collections practices. This is a problem best solved by separating the collections for your commercial and consumer customers and developing specific policies and procedures for each group.
  4. 4. Despite offering credit, you spend a small fortune accepting P-Cards. A P-Card is among the most expensive forms of payment for a merchant to process, but it is a payment method that has grown in popularity among government and commercial entities for good reason. P-Cards provide the user with various levels of purchasing controls and reporting options on purchases made. Additionally, card issuers often incentivize card usage by allowing customers to earn significant rebates on their purchases. While some companies mandate universal use of P-Cards for corporate purchases, many companies that use P-Cards still regularly opt-in to use private label commercial accounts that offer similar purchasing controls and rebate options. If your consumer-oriented private label program is not drawing commercial customers away from P-Cards as a form of payment, it’s likely that you need to differentiate your incentives for this market.
  5. 5. According to a survey conducted by the National Association of Credit Management, the vast majority of companies correct anywhere from 0% up to 10% of invoices for disputes, corrections or other issues2. This particular survey did not identify commercial invoices versus consumer invoices, but in business-to-business the cost differential between handling 0% disputes and 10% disputes is substantial. Purchase disputes seem to be the rule rather than the exception. When classifying invoice processes, be sure to separate legitimate disputes from other disputes. If you see your dispute numbers creeping above 2%, it may suggest that your customers are missing some point of information (P.O. Number, Authorization Number, Proof of Delivery, or Price Verification) to confirm that the transaction is authorized or has been conducted appropriately. By implementing these data points into the transaction process at the point-of-sale, you can avoid unnecessary disputes and improve your DSO as well.
  6. 6. You receive regular requests for specialized billing options. When working with commercial customers, your relationship shifts dramatically from a relationship with a single individual to the responsibility of satisfying the needs of multiple individuals and departments within a single company. Large corporate accounts may have multiple offices, all of which utilize a single credit line but need to be billed separately. Additionally, commercial customers are becoming more and more likely to have their own electronic billing requirements. The U.S. Government, for instance, has implemented a Wide Area Work Flow (WAWF) system through which vendors are required to submit invoices directly. Alternatively, some commercial customers may request their bills be submitted in a specific electronic format compatible with their own accounting system. Both requirements provide a cost savings to your commercial customers by removing manual billing data entry from the accounting process and, also, quickly identifying missing or inaccurate billing information. These specialized billing options are a requirement unique to commercial customers.
  7. 7. <ul><li>The best way to achieve commercial buy-in for your billing and payment solution is to build a program that is useful to the commercial customer, first and foremost. </li></ul><ul><ul><li>Research. Understand commercial customer needs, develop credit profiles, purchasing controls, and billing options that can be adapted for their individual procurement requirements. </li></ul></ul><ul><ul><li>Design. Exclusive credit, collections, and customer service groups that are trained to handle business-oriented concerns promptly and professionally. </li></ul></ul><ul><ul><li>Incentivize . Consider the value of incentive programs targeted specifically to your business clientele. </li></ul></ul><ul><ul><li>Analyze . Utilize transaction data to identify trends in procurement practices, target your marketing and sales initiatives more effectively and maximize the purchasing power of a valuable market segment. </li></ul></ul><ul><li>The oversight your commercial customers obtain through a payment program also provides exceptional value to their businesses while decreasing your company’s dispute management costs. </li></ul>A Useful Solution.
  8. 8. Multi Service. Innovation Where it Matters. <ul><li>Multi Service invoicing specializes in the design, implementation, and management of custom billing and payment solutions. The company collaborates with clients to isolate specific commercial credit and payment issues, identify measurable portfolio growth goals, and design a tailored private label payment solution to optimize customer loyalty. The company’s expertise in business-to-business sales processes assists clients in maximizing the lifetime value of individual commercial accounts and optimizing their overall commercial portfolio. </li></ul><ul><li>Thank you for your interest in this free presentation. We welcome your comments, feedback, and suggestions. Please consider sending us a note about how this paper has helped you. Check out the Multi Service Commercial Payments blog at If would like to contact a private label business development analyst directly, you can call +1-913-451-2400 or email </li></ul>