Supplier Services: A Key Driver for B2B Payments Success
One of the critical components of your B2B Payments solution has nothing to do with the software that’s used to automate your vendor payments. Instead, it’s the group of people who are responsible for supporting the vendors whom you are paying.
This group, often called supplier or vendor services, is responsible for onboarding your suppliers to a payment method that works for them and keeping them satisfied with their B2B electronic payments.
If they’re not happy with that method, your suppliers may not want to work with you again or will put you at the bottom of their priority list. And when the elevator’s not working, and tenants/customers are climbing 10 flights of stairs, that’s not where you want to be.
So, What Exactly Does Supplier Services Do for Electronic Payments?
Supplier Services are usually a group of people that have a broad range of skills: people skills, analytical capabilities, and software know-how. In short, they provide operations and sales support to your suppliers.
With respect to electronic payments, they are responsible for:
- Analyzing who can receive virtual card and other types of electronic payment methods
- Reaching out to suppliers and asking them to switch from check to an electronic payment method
- Supporting suppliers should they have questions/issues with their self-service portal
Some Supplier Services teams, like Nexus, provide services beyond payments enablement and also help suppliers drive revenue through procurement catalog initiatives.
Electronic Payments Analysis
To help get suppliers onboard with electronic payments, Supplier Services first analyzes the suppliers with whom you do business and divides them into several categories, often including:
- Already accepting specific electronic payment types, like virtual cards, as their default payment method
- Not already accepting electronic payments, but likely to (based on company size, types of transactions, etc.)
- Not already accepting electronic payments, but unlikely to
The reason for this segmentation is two-fold:
Supplier Services wants to know who is the likeliest to switch to electronic payments - and do so the quickest. This allows you to immediately ditch time-consuming and expensive paper checks right out of the gate.
At the same time, some electronic payment methods like virtual cards generate a rebate (virtual cards are processed by suppliers just like a credit card but they’re sent via email and are tied to a specific invoice. They are issued by the payments company and backed by an agent such as Visa).
Thus, most buyers, or B2B payments customers, want to maximize the number of suppliers that accept this virtual card payment type. Furthermore, they’ll be keen on the number of suppliers who have already accepted the payments company’s card as their default payment method.
Some companies, like Nexus, have a data analytics solution to help with this segmentation as well as provide insights about the best payment methods for new suppliers.
Supplier Outreach to Ask Them to Switch from Check to Virtual Card
When Supplier Services reaches out to suppliers who don’t already accept electronic payments, they often have to do a bit of explaining.
While most suppliers know about the benefits of electronic payments – faster payment, online tracking, greater security over checks – every B2B payments company has their own methodology and terms.
For example, speed of payment can differ. With some B2B payments companies, virtual card payments arrive faster than ACH payments (although both arrive faster than paper check).
Or the cost of the payment may vary from company to company. For example, some B2B payments companies charge higher fees for ACH than others. And they could charge suppliers fees to receive virtual cards, beyond the standard credit card fee.
Thus, if a supplier accepts a virtual card with one company, it doesn’t mean he or she will accept a virtual card with another. That’s why it’s important that the Supplier Services team have strong interpersonal skills – and can represent your brand well when they explain the different payment options.
Payments Support for Suppliers
Another big responsibility is support before and after the payments are made.
With many B2B companies, suppliers can track their payments in a self-service portal. All the payments’ remittance information is included in this portal (or should be). And some companies, like Nexus, also send emails to the suppliers containing the full remittance information.
But even with the most user-friendly portals, there are questions about passwords, managing users, resending remittance emails, etc. When there’s a Supplier Services team in place, all these how-tos can be answered quickly.
Representing Your Brand During Outreach
While the Supplier Services team may not be visible to you, (as a buyer) they are a significant touchpoint for your suppliers. They interact with your suppliers at the beginning of their electronic payments journey and throughout it.
As such, they need to represent you well. They must be able to handle all concerns about suppliers’ payments and address any problems quickly. If they don’t, you may be writing more paper checks and/or waiting longer for broken elevators to be fixed.