The digital age continues to drive change in the accounts receivable field and today credit cards are playing an important role in the process. In fact, over 90% of businesses who participated in CRF’s recent survey indicated that credit cards are an important tool in managing their accounts receivable portfolio and are a key element of their success.
As shared by CRF’s Friend of the Foundation, Lowenstein Sandler, the implementation and maintenance of a credit card program can produce value beyond just accepting a payment. In this CRF webinar, both speakers, Andew Behlmann and Colleen Restel, shared tips and tricks on how to implement and maintain a credit card program, while at the same time, providing value to both your customer and the company you work for.
Here are three main “value” points from the webinar:
- Customer Engagement – The development of a card acceptance program, which is almost entirely accepted within the United States and Canada, allows your customer to choose the payment option that is best and, equally important, desired by them. In essence, the customer has payment options that, coupled with today’s digital platforms, provide a seamless opportunity in the order-to-cash process. In many cases the customers will choose the option that provides them with the greatest value, and when offered, gives the supplier a competitive advantage against its competition.
- Risk Mitigation – A seldom noted but important point is that a properly implemented program can reduce your risk of slow payment, fraud, and default within your portfolio. There are three points: (1) reduced risk of slow pay by requiring the customer to pay at the point of purchase and hence improving your DSO and cash flow; (2) fraud mitigation through the use of tools that are offered by the credit card company that can greatly reduce this loss, and; (3) default risk which shifts from the supplier to the credit card company thereby reducing bad debt.
- Cash Flow – A B2B credit card program enhances cash flow through a reduction in the cycle time it takes to close a transaction, whether it be at the point of purchase or a defined payment date, by eliminating float time through the United States Postal Service.
A properly implemented credit card program is becoming an essential tool in the payment process for organizations both large and small. More than a tool, it has become a customer satisfaction mandate in a competitive environment where success can be measured by how a company engages with their customer at all levels of the revenue cycle management value chain. The accounts receivable department can play a critical role in its success.
The recorded webinar can be found on the “Knowledge Store” tab of Credit Research Foundation’s website, and for CRF members, the download is free of charge – CLICK HERE
Bonus Material: When considering terms and conditions and how to build language into your credit application CLICK HERE for a free example as provided by our webinar presenters, Lowenstein Sandler.