Is your payment process as simple as it ought to be? With so many different ways to pay suppliers, B2B payments can get complicated quickly. Some suppliers accept card payments, such as virtual cards. Other suppliers prefer ACH or wire payments. And yes, of course, some suppliers still require payment by check. So what’s the best way to manage all of these different payments? Increasingly, Accounts Payable departments are turning to one file payments to address the challenge of multiple payment types and bring unprecedented ease to the AP process.


Understand the Benefits
Wondering about the benefits of using one file with consolidated payments? Here are a few:

• Multiple Payments Streamlined into One File:
  With one file of consolidated payments, all of your supplier payments — regardless of payment type — are gathered and submitted for processing in one file from your electronic accounts payable system. That means you don’t have to separate card, ACH, wire, and check payments into different files. The simplicity of all B2B payments processed in one file is vital to streamlining AP workflows: Using one-file payment processing reduces the number of files you have to manage and generate each time you’re ready to process a payment, ultimately making it quicker and simpler than traditional processes.
  
  
• Ease of Reconciliation:
  A key benefit of using one file for B2B payments is the ease of reconciliation. After the single consolidated payment file is processed and payments are made, a customized reconciliation report can be uploaded directly to your accounting system without any manual intervention. Instead of having to manage multiple reconciliation processes and bank uploads, your reconciliation process is simplified into just one report, ultimately saving valuable time and resources.
  
  
• Pricing Optimization:
  Another benefit is the ability to optimize pricing by processing all payments through one file. Organizations save on traditional bank fees by negotiating and better controlling check and ACH processing fees. Of course, a virtual card program can actually provide an alternative revenue source, as well.
  
  

Make an Informed Decision
While many banks and financial institutions offer one file with consolidated payments through an automated AP platform, not all solutions are equal. When considering a one-file payment solution, ask yourself these questions:

• Will I have to make any additions or changes to my ERP system for one-file payment processing?
  With the right one file system, you don’t have to do anything in your ERP system to indicate how you want various suppliers to be paid: Your provider should keep track of that for you through a payments hub, which determines the appropriate way to pay each supplier based on your supplier profiles. The only thing you should have to do is provide one file of all payments for your suppliers each payment cycle, and funds will be disbursed accordingly. It’s that simple.
  
  
• When I want to change how a supplier is paid, is it easy to do?
  Make sure that the solution you choose is flexible to changes, as more and more suppliers are moving away from paper checks to electronic payments. And occasionally you may need to order a new card or change the card number used to pay a supplier. As these changes happen, your one file system should empower you to quickly and easily change the payment type for that one supplier without creating hassle in your payment process.
  
  
• Do I ever make payments with single-use virtual cards?
  Since single-use virtual cards are used for one transaction only, a good one file process should generate all virtual card numbers for you, removing that burden from your AP department.
  
  
• Will I be able to see all outgoing payments in one comprehensive system?
  Visibility is important. While your ERP system remains your system of record, your one file platform should also show all payments made, regardless of payment type, for tracking purposes. Having your outgoing payments data in one place eliminates the need to check multiple systems to view different payment types.

The key to this process is a new twist on traditional credit card-based payments. This technology now allows card-based payments to be made through a user-friendly software interface that automatically steers payments to an organization's vendors. The process utilizes the Visa and MasterCard networks to transfer payments to vendors' bank accounts - quickly and exceptionally securely, thanks to single-use ghost account (SUGA) technology.

Reduce Expenses, Increase Revenue

The most significant benefits to an organization that adopts virtual card technology are rooted in the expense-cutting and revenue-generating features of this process.

The reduction in expense results from the seamless interface between a virtual payments application and an existing ERP or accounting system. That means a significant reduction in manual accounting processes, as payments are automatically recorded upon acceptance of the payment by the vendor. A reduction in manual processing means less errors and less re-work; it also means reduced paper costs. If an organization transitions from a payment process that is majority check-based to one that is powered by virtual card technology, the savings realized will be even more significant.

Virtual card is also a revenue generator, thanks to a rebate paid on every virtual card transaction. When you pay your vendors who already accept credit cards with a virtual card, the fees they pay to accept those cards come back in part to you, in the form of a quarterly rebate. Simply put, you get paid by paying your bills.

The Bottom Line

Virtual card is a simple concept with extraordinary results. Organizations looking to get more efficiency and effectiveness out of their internal processes and boost cost-savings can tap virtual card technology to revolutionize their AP process, reduce expenses and access hidden revenue. With no up-front investment, this automated alternative to ACH and checks is an unparalleled means for organizations to do much more with less.

Most of the conversation around card payments in the nonprofit sphere tends to be about the best ways to process donations. This focus is, of course, highly understandable: No 21st century nonprofit can thrive without empowering donors with an easy means of supporting the organization. But what about the flip-side of the payment coin? Nonprofits have to pay their suppliers, too, and some ways are smarter and more beneficial to charitable organizations than others.

For instance, when nonprofits implement virtual payment solutions for their automated accounts payable, the accrued benefits can be exceptional - revolutionizing not just the accounts payable process, but organizational funding strategies, as well. A not-for-profit organization that implements virtual card payments for a significant portion of its AP spend can expect to reap a host of perks, including cost-savings; time-savings; heightened payment security and control; and most compellingly, an alternative source of revenue to help fund its mission.

Reason #1: More Cost-Savings
Virtual cards provide cost-savings to all types of organizations - not just nonprofits - in several ways:

• A more efficient payment process helps organizations save money on staffing, processing and posting costs.
• By providing revenue share to their users, virtual cards can help fund AP improvements like an ERP upgrade.
• Because virtual card is a proven AP solution that costs nothing to implement, users avoid the financial risk typically associated with adopting a new payment platform.
  
  

Reason #2: More Time-Savings
Time is money, particularly for an organization operating on a strict budget, so it's worth delving more into the ways virtual card promotes efficiency for its users:

• Deploys a payments process that takes 60% less time than paying by check.
• Bypasses the time‐intensive practice of supplementing ACH payments with detailed invoice information.
• Seamlessly interfaces with any accounting system and provides automatic reporting.
• Requires no downtime for install and implementation.
  
  

Reason #3: More Payment Security and Control
In addition to being hyper-efficient, virtual card is incredibly secure. Here's how this technology helps nonprofits uphold their fiscal accountability:

• Reduces risk of check or wire fraud by taking advantage of Single Use Ghost Account (SUGA) technology: each payment is made with its own, one-time-use, 16-digit credit card number.
• Suppliers keep no buyer payment info on file. No card number on file = no opportunity for theft of card number.
• Reduces risk of “maverick” spending that comes with purchase cards by centralizing buying through virtual cards, which are authorized for a specific payee and specific payment amount that can't be altered by a third-party.
  
  

Reason #4: Mission-Funding Revenue Share
Perhaps the single biggest way virtual card payments can revolutionize a nonprofit's AP strategy is by transforming accounts payable from a cost center to an authentic source of revenue to help fund organizational operations:

• Every payment made generates a rebate for the purchasing organization.
• Quarterly rebate checks deliver significant, tangible funding potential.
• Rebates in no way compromise nonprofit status.
  
  

The fact that, at press time, more than 20,000 organizations now pay more than 1 million suppliers with virtual cards is a testament to what the platform delivers: super-efficient, super-secure payments, and a significant revenue share. These facts, along with an increased openness to all forms of electronic payment, explain why virtual card payments have surged among nonprofits. Is your nonprofit organization already using this simple, highly effective technology? What do you love about it?

It is no secret that printing checks in house is inefficient and costly. At one point or another, most organizations have attempted to move vendors to electronic payments, such as ACH. However, these initiatives often fall short of expected results for a variety of reasons, including:

• Internal resources are spread thin and do not have time to focus on such initiatives
• Vendors do not like to receive ACHs because the payments can be difficult to apply as the data transmitted through the banking system is limited.
• It can be difficult to ask your vendors for a “favor” to improve your efficiency.

Did you know your accounts payable - historically a cost center - can actually drive your organization's cost savings? By shifting from resource-intensive approaches to more efficient, effective and secure payments, your AP can move from cost center to a profit center.

Bank of America has estimated that a B2B payment made by paper check cost between $4 to $20 per transaction, factoring in paper costs, postage, and the staff hours spent disbursing, collecting and reconciling the payment. More streamlined, less high-touch payment platforms like electronic virtual payments dramatically reduce the manual work needed to process a check - enabling your employees to work more productively - while also eliminating paper and postage expense.

One of the most brilliant aspects of an AP process like virtual card is that it actually pays organizations a rebate to use it for their payments. These rebates are significant: The more you pay, the more you get back. And if your organization is upgrading or investing in a new enterprise resource planning system for the first time, one very tangible impact of the rebate is that it can defray the purchasing cost of that ERP, while ensuring more timely, more secure and more efficient payments. 

Of course, your rebate can offset any number of corporate expenses, not just those related to your accounts payable department. The funds are yours to do with as you see fit. In this way, virtual card represents an incredibly powerful cost-savings tool, for both for- and nonprofit organizations.

Not all of your vendors are going to accept virtual payments - for a variety of reasons, some suppliers will always prefer paper checks, distributed payment cards, ACH or wire. Nevertheless, outsourcing these activities to an organization that specializes in these printing, mailing and processing activities can bring significant efficiency.

Check fraud, theft and other payment security issues like business email compromise cost companies dearly each year. The most obvious fraud-protection advantage virtual card offers over other formats, the fact that each payment is made via a one time use randomly generated, sixteen-digit account number.

Additionally, there are several lesser-known features of virtual card payments that help stop security breaches and block the costs associated with them. These include non-forwardable payment notification emails, pin-controlled payment access, controls on the amount to be processed, and Merchandise Category Code (MCC) checks.

Finally, security is enhanced by the fact that, suppliers keep no buyer payment info on file. No card number on file = no opportunity for theft of card number. Limiting the use of plastic in favor of virtual cards reduces risk of “maverick” spending that comes with purchase cards by centralizing buying through virtual cards, which are authorized for a specific payee and specific payment amount that can't be altered by a third-party.