15 - 17 October, 2019
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Here’s How Barclaycard’s Virtual Card Payment Solution Aims to Improve the Procurement Experience by Simplifying Reconciliation and Driving Process Efficiencies
Today, there are multiple organisations that are still relying on traditional methods such as BACS and PO numbers to settle invoices. Although there are certain advantages to this approach, manual transaction processing causes delays and the admin-heavy procure-to-pay processes are costly and inefficient. This is due to the high volume of human and capital resources which are required in order to set-up and maintain them.
Slow or late payments can, of course, be crippling for suppliers and traditional payment methods don’t benefit buyers either.
The traditional approach leaves them in a position where they are constantly grappling with "process overheads". This adds a strain to the number of new suppliers they can onboard in the first place, as they are left with a much smaller pool to choose from, putting them at a disadvantage, as they can only access a much smaller fraction of the market.
The time and costs involved with manually processing invoices can be substantial. According to a white paper from document management company Cleardata, the cost of paying a single invoice can be up to £50, meaning that for businesses dealing with a large number of external suppliers, costs can quickly mount up.
Thankfully, digital payment technology is starting to engender dramatic change. With it, both buyers and suppliers can streamline the procurement process, cut out inefficiencies, and reduce costs across the whole organisation.
Now, Barclaycard is hoping to transform the payment process in the B2B world with its virtual card payments offering – known as Precisionpay. This can be integrated into a company’s ERP system, allowing for seamless payments, as well as easier management and approval controls.
Virtual Card Payments
Virtual cards aren’t like traditional payment cards which link one card to one individual or business. Rather, virtual card solutions link one, unique, single-use “virtual card” to one transaction or chain of transactions. One of the main benefits of using virtual cards for procurement is that the technology simplifies reconciliation.
Employees needing to make a payment can simply request and have cards approved online or via a mobile app, allowing the buyer and seller to bundle a transaction or a series of transactions under a single-use card number. The statement is then automatically matched to the purchase order, rendering reconciliation a fully-automated process.
This cuts down on the time procurement teams would otherwise spend reconciling payments and hunting for missing paper records. Not only that but controls on credit limit and dates of use can also be set per transaction, eliminating concerns about uncontrolled or unaccounted for or questionable spend.
Crucially, the Precisionpay virtual card platform is about integration with existing procurement systems, which is key to unlocking the technology’s full value and potential. David Price, Managing Director of Client Coverage at Barclaycard explains further, “In B2B payments, we’ve had good traction for Precisionpay in mid to large corporates, but utilisation for the very largest multinationals has been limited, and that’s because of their significant investments in sophisticated procure-to-pay (P2P) software.”
Virtual card platform systems can provide enhanced user experiences and they allow businesses to procure in a cost-efficient and compliant way. In the past when procurement teams were using this new system, they had to come out of the secure P2P environment, to complete the payment via a separate portal, which wasn’t ideal.
However, Barclaycard’s solution enables Precisionpay virtual cards to be integrated into existing systems via an API. This has ensured it’s easy to use as well as providing a fast, convenient and secure payment option for users within the trusted and familiar P2P software that they are already using.
“As soon as transactions are authorised, virtual card payments are triggered automatically so there’s no need to leave the environment or to process the payment manually.” “The common terminology is procure-to-pay; through integrations, it’s a move towards procure-and-pay.” Says Price.
Barclaycard has already formed a strategic partnership with Coupa to integrate virtual cards into Coupa’s business spend management system. The Coupa Pay with Barclaycard offering is designed to create a fast, secure, and convenient way for businesses to manage payments as part of their broader business spend management strategy.
Rob Tuckwell, Director of Partnerships and B2B at Barclaycard explains that Coupa is using virtual cards to enable greater control and reconciliation benefits:
“This is a much more efficient way of dealing with high-volume, low-value and one-off suppliers….“It means the supplier can be paid at the point of delivery, which is much earlier in their invoice cycle than traditional payment methods. Suppliers will no longer suffer from late payments or extended payment terms helping them confidently forecast their cash flow.”
One of the greatest benefits of virtual cards is that suppliers can be onboarded with greater trust knowing that they will be paid on time. This puts procurement in a much better position to negotiate the best deal while ensuring the company is doing business with an extended network of suppliers on the market.
Virtual cards offer a more flexible and efficient way of paying suppliers for all business costs, improving efficiencies, removing manual processes, as well as helping to cement lasting relationships with partners – all while giving procurement the visibility needed to stay in full control of cash flow.
It will be interesting to see how keen the B2B world is to adopt virtual card solutions like Precisionpay, and if such solutions start to become mainstream in procurement in the coming years.
Procure-to-pay processes are set to be a hot topic at ProcureCon Europe 2019, taking place this October at the NH Tower, Barcelona.
Don’t forget to download the agenda today for more information and insights into this incredible event.