Virtual Card Payments for A/P Making Money Paying the Bills

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1 Virtual Card Payments for A/P Making Money Paying the Bills Todd Albers, Senior Payables Program Strategist U.S. Bank Minnesota AFP Annual Conference April 28, 2015

management in the financial services area, the last nine years working

2 Introduction Todd M. Albers US Bank, Corporate Payment Systems -15+ years in product management in the financial services area, the last nine years working specifically on virtual card & purchasing card integrated solutions across the public and private sectors. 2 U.S. Bank Confidential

3 U.S. Bank Profile and Expertise 3 U.S. Bank Confidential

4 Discussion Topics Current Payment Trends Overview of Virtual Card Solutions Questions Next Steps 4 U.S. Bank Confidential

5 Factors Driving Electronic Payment Trend Source: PayStream Advisors, Q U.S. Bank Confidential

6 Payment Shifts Payment Shifts in Past 12 Months (Mean Distribution) Source: PayStream Advisors, Q U.S. Bank Confidential

7 What s Driving the Change? Key Drivers of Accounts Payable Makeover Source: PayStream Advisors, Q U.S. Bank Confidential

8 Impact of Cards on Operational Efficiency $90.20 $69.82 $20.38 Source: 2014 Purchasing Card Benchmark Survey, RPMG Palmer & Gupta 8 U.S. Bank Confidential

9 Questions for an Informed Decision Are we selecting the optimal methods of payment? Do we have the right level of visibility? How can we benefit from improving our procure-to-pay practices? How do our policies and procedures compare to industry best practices? Do we have appropriate controls? 9 U.S. Bank Confidential

How can we benefit from improving our procure-to-pay practices?

10 Common Barriers to Change, Control Need to keep existing approval processes, especially for larger dollar purchases Don t want to increase the number of cards in circulation Data, Our organization has not changed payment methods because we Want to retain all pre-purchase data Tax Require tax review prior to payment Change No appetite to change existing pre-payment processes Cost Other providers charge fees for software, etc. 10 U.S. Bank Confidential

payment methods because we Want to retain all pre-purchase data Tax Require tax review prior to payment Change No

11 Solution Addressed by Virtual Cards 11 U.S. Bank Confidential

12 Virtual Card Benefits Reduce operating costs Increase control Expand spend visibility Enhance cash management Improve revenue sharing opportunities 12 U.S. Bank Confidential

13 Virtual Cards Business Process View Only the payment method changes PAYMENT INVOICE RECEIPT FINANCIAL SYSTEM CODING APPROVAL 13 U.S. Bank Confidential

14 How Do Virtual Cards Work? Truly as easy as U.S. Bank Confidential

15 Step 1: Submit Truly as easy as 1 Submitting your payments is easy. Simply submit an automated file or enter the required information into U.S. Bank Access Online and your payment is initiated. 15 U.S. Bank Confidential

16 Step 2: Pay Two automated payment options: Cardless accounts Straight-through processing Truly as easy as U.S. Bank Confidential

17 Cardless Options Truly as easy as 1 2 Pay suppliers securely using virtual dynamic credit adjustments and single-use accounts. Suppliers receive full remittance details so your payment can be applied correctly, even when including multiple invoices on one payment. 17 U.S. Bank Confidential

Suppliers receive full remittance details so your payment can be applied

18 Straight-through Processing Truly as easy as 1 2 Straight-through processing / Buyer Initiated Payments allows payments to be directly deposited into suppliers' bank accounts. Faster reconciliation for both buyers and suppliers strengthens relationships. 18 U.S. Bank Confidential

deposited into suppliers' bank accounts.

19 Step 3: Monitor Truly as easy as Monitor your payments and update your financial systems using the convenience of Access Online reporting and extracts. 19 U.S. Bank Confidential

20 Sample Spend Categories Water and water conditioning Regional utilities Uniforms Legal fees Association memberships Media and communications Building maintenance Industrial supplies Waste disposal Health services Contractors/consulting Raw materials Inventory purchases And Many More 20 U.S. Bank Confidential

maintenance Industrial supplies Waste disposal Health services

21 Buyer and Supplier Benefits Top Benefits of Sending or Receiving Electronic Payments (Percent of Organizations) All Respondents Cost Savings 57% Improved Cash Forecasting 46% Fraud Control 39% More Efficient Reconciliation 37% Working Capital Improvement 27% Straight-through Processing to A/P or A/R 24% Better Supplier/Customer Relations 24% Reduction in Days Sales Outstanding 20% Ability to Take Early Payment Discounts 16% Source: AFP, Electronic Payments Survey, November U.S. Bank Confidential

22 Example Business Case - Buyer Results Enhanced cash management Improve forecasting due to precise timing of payments Increased control and security Increased automation and streamlined reconciliation Electronic payments are easily matched to statement Reduced payment costs Both buyers and suppliers have streamlined processes Eliminated paper Expanded rebate opportunities PeaceHealth saves about $50 per check by paying invoices electronically so moving some of their largest P.O. vendors into electronic payments saved thousands. That s above and beyond the costs and time associated with envelope insertion, check printing and postage. 22 U.S. Bank Confidential

23 Supplier Results Receive faster and more predictable payments Reduced paper Improved reconciliation Fewer trips to bank Lowered carrying costs Stronger relationships 23 U.S. Bank Confidential

24 Summary and Questions Many companies are looking to e-payment methods to reduce operating costs and increase control Additional benefits include expanded spend visibility and enhance cash management Some electronic payment methods allow you to pay suppliers using dynamic credit adjustments and single use accounts Buyer and Supplier both receive benefits 2015 U.S. Bank National Association. All trademarks are the property of their respective owners. CPS 1056 (R-03/15) MMWR U.S. Bank Confidential

25 Thank you! Todd Albers, Senior Payables Program Strategist U.S. Bank (612) U.S. Bank National Association. All trademarks are the property of their respective owners. CPS 1056 (R-03/15) MMWR U.S. Bank Confidential

Treasury Management. WellsOne Commercial Card

Treasury Management. WellsOne Commercial Card Treasury Management WellsOne Commercial Card $182,000 Average value a company can generate for every $1 million in spending converted to commercial cards, through reduced processing costs, increased discounts,