1) Adapting consumer payment programs for commercial use requires understanding commercial needs like purchase controls, billing options, and incentives to draw customers away from payment cards. 2) Commercial customers have different requirements than consumers like separate invoice processing and collections tailored to their needs. Dispute rates above 2% may suggest missing purchase details. 3) Large corporate accounts require specialized billing like separate office invoices and electronic formats for their accounting systems.

1. Adapting your Consumer Payment Program to Commercial Requirements

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. 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. 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. 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.