Virtual Pay Profiles - U.S. Bank Paymentsdocs.usbpayment.com/Virtual Pay Case Study Increase... · 2018-01-17 · teaching, and working environment for over 60,000 students and 32,000

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Virtual Pay Profiles

Virtual payments score top marks with University of ColoradoThe University of Colorado is a public research university with campuses in Boulder, Colorado Springs and Denver, as well as the Anschutz Medical Campus in Aurora. The

University strives to provide an outstanding, respectful, and responsible living, learning, teaching, and working environment for over 60,000 students and 32,000 employees. The University and U.S. Bank began working together in 2010 when the University moved its purchasing card, corporate card and one card programs into U.S. Bank’s Higher Education Card Consortium (HECC) in an effort to operate more efficiently and cut costs. HECC is a contract that offers benefits to higher education institution members for pooled spend under a shared agreement.

Challenge: new procurement process jeopardizes rebate opportunity

In 2011, the University adopted a new electronic procurement system that allowed employees to browse e-catalogs and purchase from a variety of key suppliers. While significant workflow advances were made, traditional commercial cards were not a supported payment option. The University quickly realized that it would lose out on rebate revenue if this problem couldn’t be rectified.

Virtual Pay Profiles

Solution: virtual payment technology bridges the gap The U.S. Bank team invested the time to fully understand the University’s new system and payment capabilities. Payment Plus, U.S. Bank’s virtual payment solution, was proposed to enhance the University’s new payables process. Virtual payments are cardless account numbers set to a specific supplier, payment amount and date range. These highly secure electronic payments allowed the University to retain the rebate benefits of a traditional commercial card program while seamlessly integrating into its electronic procurement system.

Invoice review identifies new supplier opportunities Implementation began in late 2011, and U.S. Bank and the University joined forces to enroll strategically targeted suppliers. The University then developed a highly effective strategy to continue enrollment momentum. It created a weekly report identifying all suppliers with a large volume of invoices and/or high dollar payments. This “invoice mining” process became an effective way of identifying and enrolling high potential virtual payment candidates.

Program optimization fuels 20% growthOnce established, the University’s program grew at a steady pace. In 2014, U.S. Bank proposed an optimization review to ensure the program was delivering maximum value. After assessing the University’s 35,000 supplier A/P file, U.S. Bank was able to identify a significant amount of new supplier opportunity for virtual payments. The U.S. Bank Supplier Enablement team then fielded a campaign that enrolled 100 more suppliers, representing 65% of the targeted spend. This initiative helped the University realize a 20% increase in virtual payment spend from 2014 to 2015. With additional foresight, U.S. Bank validated each supplier’s initial payment to ensure that everyone understood the new payment method and was comfortable processing virtual payments.

“U.S. Bank recommended virtual payments because it allowed us to continue earning rebates. But it also simplified reconciliation for both ourselves and our suppliers, while giving us the flexibility to pay suppliers faster.” – Sandy Hicks, Chief Procurement Officer

Invoice Mining

+20% Spend Increase

Virtual Pay Profiles

Proactive communication increases supplier enrollmentTaking a proactive approach to supplier enrollment helps the University stay on top of virtual payment opportunities as they arise. For starters, communications with new suppliers emphasize virtual payment as the preferred payment method, and the University promotes the solution on its electronic procurement system. In addition, the University limits suppliers to two payment methods—virtual payments and checks—and offers accelerated payment terms as an incentive for virtual payments.

The University values its suppliers and fosters mutually beneficial, respectful relationships. To that end, the Strategic Procurement and A/P departments are diligent about paying suppliers on a timely basis and host quarterly business reviews to align goals, targets and scorecards. Key suppliers are also invited to an annual awards event, honoring the continued partnership between those suppliers and the University.

“We found that suppliers were more willing to enroll in the program when we were upfront about our goals and made virtual payment our preferred payment method.” – Duane Tucker, Director of Strategic Procurement

» Lead with virtual payment

» Offer term incentives

» Limit other options

» Make timely payments

» Recognize key suppliers

Keys to Success

Virtual Pay Profiles

Results that make the grade

• Increased virtual payment spend by 275% during the four calendar-

year contract period 2013-2016

• Grew rebate revenue by 344% during the four-year contract period

2013-2016

• Conducted a program optimization review that added 100 suppliers,

generating a 20% YOY virtual payment spend increase

• Reduced manual intervention in the payment process, giving

University staff more time to focus on supplier relationships

• Decreased paper production, contributing to cost savings and a more

environmentally sustainable process

Best practice lessons

• Build a comprehensive enrollment strategy and use a variety of tactics

such as targeted campaigns, invoice mining, contract language and

regular program optimization reviews.

• Communicate to suppliers that virtual payment is your preferred

payment method. When possible, offer more attractive payment terms

as an enrollment incentive.

• Commit staff resources to manage supplier relations and ongoing

enrollment efforts.

• Conduct a post-enrollment payment review to ensure that suppliers

are processing payments correctly.

The University continues to look ahead with goals for significant program growth. They currently anticipate a spend volume increase of 30% stemming from an estimated 500 suppliers. The solid supplier enrollment practices now in place, coupled with the expertise of U.S. Bank’s Supplier Enablement team, position the University of Colorado for success down the road and beyond.

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For more information about virtual payments, contact U.S. Bank at [email protected] or 866.274.5898.

+275%

+344%

2013 2014 2015 2016

2013 2014 2015 2016

Spend Growth

Rebate Growth