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3 ways to sell your suppliers on credit card payments

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Paying your suppliers by credit card is a smart financial move that is good for cash flow, financial management and overall expense reduction. But to access these gains, your vendors must first agree to accept your card payments.

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3 ways to sell your suppliers on credit card payments

  1. 1. 3 ways to sell your suppliers on credit card payments
  2. 2. 2 Paying your suppliers by credit card can benefit your business via: Improved cash flow Better managed finances Reduced expenses
  3. 3. 3 Both you and your bank can play a role in making that happen. Before you can unlock those benefits, your suppliers must agree to accept cards.
  4. 4. 4 Your bank helps through “supplier enablement” — working with you and your suppliers to facilitate the transition to electronic payments.
  5. 5. 5 Your most important job? See the issue from your suppliers’ perspective — so you can explain how this change will benefit them.
  6. 6. 6 #1 Shorter payment terms
  7. 7. 7 For example: If you usually pay in 60 days by check, offer 14 days by card. That provides a cash flow boost to offset the payment fees. Your suppliers will incur a small card processing fee. Offer early payment or shorten payment terms so they can further benefit.
  8. 8. 8 BONUS: Those funds are guaranteed and payment is typically funded in 24-48 hours, unlike snail-mail paper checks.
  9. 9. 9 #2 Simplified accounts receivable
  10. 10. 10 Checks require the supplier to: 1. Open envelopes 2. Reconcile payments 3. Endorse checks 4. Make deposits 5. Wait for funds from check processing Accepting cards saves them time and money.
  11. 11. 11 The best solution: VCNs Virtual card numbers (VCNs) are unique, 16-digit numbers generated for specific transactions. VCNs are the most secure and fraud- preventative credit card transaction VCNs make it easier to identify and reconcile each payment.
  12. 12. 12 #3 A safer payment process
  13. 13. 13 Checks are most vulnerable. of companies surveyed have experienced check fraud or attempted check fraud. 71% — Association for Financial Professionals 2016 report Q: Why should your suppliers care? A: If you are targeted, their payment will be delayed while you sort out the problem. Card payments reduce that risk.
  14. 14. 14 Key takeaways:  You can offset your suppliers’ transaction fees by offering shorter payment terms.  Card payments (especially VCNs) streamline accounts receivable.  Card payments are safer.
  15. 15. Facilitating new payment setup 3 15 Your bank may provide supplier enablement services like: Explaining benefits 2 Contacting suppliers 1 But …
  16. 16. 16 … you can contribute by understanding your suppliers’point of view and explaining how they benefit.
  17. 17. 17 BONUS: Enhance your supplier relationships. Creating a faster, more secure payment process can strengthen your ties with suppliers — which is good for your business and theirs.
  18. 18. SVB’s Global Treasury and Payments Advisors can share more details about supplier enablement. ©2017 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. B-16-15179 Rev. 02-16-17. Need more information? Check out SVB’s Payments Trends and Insights page.

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