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Conduct a payments supplier analysis

Effective payments supplier analysis and how it can benefit your business

April 9, 2024

There are a lot of factors to consider when choosing a supplier to work with. From a payments point of view, the ability to streamline payments and securely pay suppliers helps to reduce any chance of delayed services, improve your own reconciliation, and build stronger supplier relationships. Virtual cards are a popular payment type for many businesses. But how do you know which suppliers accept virtual cards? And how can you better understand where the opportunities are? Let’s delve into the reasons behind suppliers’ hesitations and introduce a solution through effective payments supplier analysis.

Why would you undergo a supplier analysis?

A thorough supplier analysis will help you identify which suppliers are already accepting virtual cards. You can then take that information when making decisions on new suppliers or to determine which suppliers will more easily accept your own virtual cards, allowing you to take advantage of this payment type’s many perks, such as enhanced security, streamlined reconciliation, and improved cash flow. A supplier analysis enables you to identify potential issues, tailor communication strategies, and provide the necessary support to ease the transition to virtual card payments.

What are suppliers’ concerns about virtual cards?

Suppliers may harbor legitimate concerns that discourage the acceptance of virtual cards. Although every supplier is different, common concerns are:

  • Upfront costs are expensive: Many suppliers worry about the operational expenses associated with implementing virtual card payments. The perceived complexity and potential disruption to existing processes can make them hesitant to invest time and resources. 
  • Onboarding costs are high: The onboarding process for virtual cards may be perceived as time-consuming and operationally expensive. Suppliers may be concerned about the effort required to integrate this new payment method into their existing systems. 
  • The process is complicated: Fear of complexity often holds suppliers back. They may be hesitant to navigate what they perceive as a complicated process for receiving virtual card payments.
  • Fear of job loss: Suppliers may worry that embracing virtual cards could lead to job losses, particularly if they believe that automation through virtual card payments may replace human roles. It’s crucial to communicate that the goal is empowering your employees to work smarter, build scalability to grow your business, and free them up to focus on more important tasks that can’t be automated.
  • Is this a scam?: In the age of increasing cyber threats, suppliers may question the legitimacy and security of virtual card transactions. Addressing these concerns through education and transparency is vital.

How do suppliers benefit from virtual cards? 

Suppliers experience the benefits of virtual cards, too. These perks (which are expanded upon in this blog post) include: 

  • Saving money
  • Reducing fraud
  • Faster processing
  • And more!

Learn 6 reasons your suppliers
will love virtual cards

Download your free infographic for more!

What does a supplier analysis look like? 

A comprehensive supplier analysis involves evaluating each supplier you are considering. The process includes open communication, collaboration, and understanding the unique aspects of each supplier’s business. Here’s a simplified breakdown of what a supplier analysis might involve:

  • Analyzing vendor list: Prioritize suppliers based on strategic importance and transaction frequency.
  • Implementation and collateral review: Tailor solutions based on the specific needs and concerns of individual suppliers to ensure a smooth transition to virtual card payments.
  • Communication: Open a dialogue with suppliers to understand their current payment processes, pain points, and willingness to explore virtual card options.
  • Work with suppliers: Begin calling suppliers and weighing your options before making a final decision. 

What’s one example of a supplier analysis?

Choosing an ideal virtual card vendor involves a five-step approach

  1. Select your virtual card provider: Evaluate each provider’s tools, technology, and flexibility. A key criterion is finding a provider with a quick-to-implement, secure, and flexible system. 
  2. Pre-opportunity analysis: Collaborate with your chosen payments technology partner to conduct an opportunity analysis. Present opportunity, size, initial target suppliers, and potential spend. It’s also a good rule of thumb to match suppliers for acceptance history via card networks. 
  3. Contract and approval: After confirming the opportunity and deciding to transition, the next step involves contract and credit approval. 
  4. Implementation and supplier enrollment: Upon securing a contract, validate suppliers for the virtual payments program. Follow up on supplier emails and continue email correspondence to grow your relationship. 

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