Case Study: Medical Device Manufacturer
Medical Device Manufacturer Goes Paperless with Corcentric Payments
When a Fortune 500 medical device manufacturer completed a bank-sponsored virtual card program, the company was left in a less than ideal situation. The number of checks and amount of check spend converted to virtual card, as well as their card rebate, was significantly less than anticipated.
The company felt there was an opportunity to further reduce costs by swapping manual checks for electronic payments, but the bank was not interested in assisting them with this effort.
Following a recommendation from a fellow CFO, the company discovered Corcentric Payments, a solution that would audit the results of their initial virtual card program and provide a payment process that would optimize cash flow.
Once engaged, the Corcentric audit team got to work. The results were eye-opening.
- The amount of check spend converted to virtual card was overestimated by a factor of 3x
- Because a tiered card rebate structure was used, half of the converted spend tiers were in a range where there was no chance of achieving the converted spend needed to see a larger rebate percentage
- The bank secured only 350 of about 4,000 card-capable suppliers that they identified. Corcentric uncovered an opportunity to engage with more than 7,500 card-capable suppliers who were unaware that the company wanted to pay them electronically
- The bank made no attempt to convert suppliers to ACH, leaving the company to initiate most of its payments by check
By implementing Corcentric Payments, the company was able to fulfill its requirement of a minimum 75% conversion of check payments to electronic payments in less than 90 days.
Following the audit, Corcentric created a report that detailed these findings as well as the quantified lost opportunity of the virtual card program. The report also identified the suppliers who remained a good fit for conversion to electronic payment and provided a framework for how the company could successfully convert to electronic payments.
By implementing Corcentric Payments, the company was able to fulfill its requirement of a minimum 75% conversion of check payments to electronic payments in less than 90 days. Corcentric Payments also guaranteed the company’s request of a minimum 30% conversion of check spend with targeted suppliers to virtual card during the same 90-day period.
- Corcentric Payments
500% increase in checks converted to electronic payments
100% increase in spend converted to virtual card
$1.5M increase in annual net benefit