Procurement managers: Are you getting the data you need from your payment provider?

Your procurement team is being propelled towards a more modern playing field of B2B payments – and it’s not quite ready for battle.

There’s the issue of low-quality data due to a total lack of visibility, resulting in lost control, lost opportunities, and misinformed business decisions.

In today’s landscape, managing supplier relationships can be tricky. The traditional model of account-based purchasing by invoice with pre-agreed payment terms is gradually being replaced in many cases by more consumer-style transactions.

A good example is the increasing trend towards subscription-based, card-only online payments for vital services – these often require immediate and upfront payment and can be very hard to reconcile using traditional systems. And even one-off payments are invariably made online via a credit card – which presents a huge problem for procurement teams trying to maintain full control of the process.

One thing is crystal clear: Your procurement team needs access to better data.

The shift away from traditional approaches and moving to data-driven decision-making has ushered in a new era of efficiency and precision. And more and more businesses are jumping on board.

In fact, according to recent research, three in five organisations are using data analytics to drive business innovation in 2023.^[1]

There’s a growing realisation that better data is empowering procurement departments industry-wide, enabling them to make informed decisions, optimise costs, manage suppliers effectively, and ensure compliance.

But what is the secret to accessing this level of data? The answer lies in partnering with an expert payment provider.

Join us as we uncover the invaluable role of data in shaping the future of procurement (and the data your payment provider should be bringing to your business).

The power of payment data: Driving informed procurement decisions

Your procurement team wants to cut costs, negotiate better contracts, and make more strategic business decisions.

But without the data to do it, they’re coming up short. Quality data from your payment provider should give you:

In fact, according to Coupa, pre-approval of virtual cards can reduce daily transactions by 80%.^[2]

You’ll also get insight into whether rules and regulations are being adhered to, allowing you to combat the non-compliance issues that often lead to increased costs and inefficient use of resources.

High-quality data means that procurement managers can make informed, strategic decisions that have a ripple effect across the entire supply chain.

You’ll be able to pinpoint reliable suppliers, predict supply disruptions, and identify opportunities for cost savings, forming a resilient supply chain that adapts easily to ever-changing market conditions.

Key types of data and how they benefit your business

When it comes to data, you want both quality and quantity.

The more types of quality data you have access to, the greater the insight – and the greater the benefits.

Your payment provider should provide:

Procurement managers, ask yourself these questions:

• Does it integrate seamlessly with existing procurement management systems through an API?
• Can it be tailored to the needs of your business by bringing together basic transaction data with your business data points like PO numbers, auth codes and employee information?
• Is it clean and able to be analysed internally based on the needs of the organisation, or are static reports with little customisation being sent instead?
• Is it being provided securely and in line with regulations such as GDPR?

Provided in the right format, you’ll be able to analyse your transaction data to identify problem areas, strengthen partnerships, and recognise rogue transactions quickly, keeping fraudulent activity under control.

Armed with quality payment data, you can assess individual supplier performance.

You’ll get data-driven insights on things like pricing trends and payment history, which allow you to target your strategic negotiations, manage risk mitigation, and develop cost-effective sourcing strategies.

But note that payment providers can – and should be – integrating these performance measures in the delivery of transactional data, making analysis and oversight easier for the procurement team.

Expense categorisation

But your payment provider should be able to categorise your data into expense types such as office supplies, software, and maintenance, for example.

Here’s why accurate expense categorisation is crucial:

• You need your data to be reliable so you can plan accordingly. The cost of certain supplies rising rapidly (such as energy costs in the wake of the Ukraine conflict, for example), means that having an accurate understanding of how those costs are shifting is integral to helping procurement teams allocate better budgets and plan ahead.
  
  
• A major benefit of expense categorisation is that it allows procurement managers to identify potential cost control issues, so you can take immediate cost-saving action (such finding new suppliers or renegotiating contracts).

By categorising expenses, procurement teams can track spending patterns. For example, say that you’re routinely overspending on office supplies - categorising this data shines a light on such trends. Armed with this insight, your team can negotiate bulk discounts, switch suppliers, or set stricter budget limits, preventing future budget overruns.

• Expense categorisation also helps with compliance monitoring and adhering to regulatory requirements such as that the right tax codes are applied to each expense.

Geographic insights

Managing procurement activities across multiple regions can be a challenge, as there are many factors to consider, such as local market conditions, currency fluctuations and geopolitical issues.

Monitoring data on a regional basis can help procurement managers understand where costs might be rising in different regions, or if a specific region is responsible for a sharp rise in spend across a total category, which will help them remedy the issue quickly.

For example, say a procurement manager analyses their expenses across different regions and the data reveals a pattern of inflated accommodation costs in major cities. By negotiating long-term contracts with preferred hotels, they can negotiate a lower accommodation rate for their employees.

Virtual cards: The gateway to comprehensive data reporting

Virtual cards are quickly becoming a preferred solution for procurement departments – they’re fast, secure, and flexible – and now they’re proving to be an optimal source of data reporting too.

In fact, the global virtual cards market was valued at US$13.31 billion^[3] in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 20.9% from 2023 to 2030.

A virtual card will allow you to:

Virtual cards are settled through one central account and itemised on a single invoice – helping to consolidate data into one clear overview.

Unique card numbers for each purchase results in detailed data that helps procurement managers analyse spending patterns and better identify outliers.

For example, say a procurement manager is struggling with lack of data visibility during a project. With no eye on expenses, they lack control over costs.

By bringing a virtual card into the mix, they can track expenses with total transparency. This enables the procurement manager to have full data visibility, detailed data analysis, and better expense management.

Manual expense reporting is not only time consuming but also eats money and ramps up employee stress.

The superior data you get from virtual cards can be easily integrated into your accounting systems, streamlining the entire process.

A procurement manager, armed with virtual card expense reconciliation, can limit laborious and time-consuming paperwork. By integrating an automated system they can make their expense reporting more seamless, faster, and error-free. And the time savings mean they have better resource allocation.

Elevating procurement through data-driven decision-making

It’s there in black and white: High-quality payment data is a game changer for procurement teams.

You’ll get benefits such as:

• Full data visibility to make cost-saving decisions
• Better control over costs and budgets
• Detailed transaction data for enhanced reporting capabilities
• A streamlined reconciliation process that saves time, money, and stress
• The data insight you need to make better business decisions

And there’s no better way to enhance these benefits than by bringing virtual cards on board – the benefits are boundless. They’re a powerful tool for capturing, reporting, and using payment data to drive your procurement department forward.

Want to know more about virtual cards and how they can benefit your procurement team? Get in touch with an expert member of our AirPlus Team to talk it through.

[1] https://www.wavestone.us/wp-content/uploads/2022/12/Design-2023-Data-Analytics-Survey-Report.pdf

[2] https://www.coupa.com/blog/finance-ap/how-virtual-cards-for-b2b-payments-improve-cash-flow-capture-efficiencies-and

[3] https://www.grandviewresearch.com/industry-analysis/virtual-cards-market-report