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Understanding the value of a payment program to National Accounts
1. Understanding the Value of a Payment Program to National Accounts:Cost-Drivers within the Trucking Industry
2. Top-of-Mind Concerns for Over-the-Road Fleets. Today’s national fleets are juggling a multitude of financial challenges. With average fleet operating margins of 2-4% in the United States1, these financial variables ladder up to overwhelming business concerns for over-the-road trucking companies. A survey by the Kinetic Group of 300 fleets participating in aftermarket parts programs identifies the role billings and payments can play in managing these financial challenges for fleets. 1Kuntz, Ray. Transportation’s Role in Climate Change and Reducing Greenhouse Gases. July 14, 2009.
3. Payment Cost-Drivers in the Trucking Industry. Overall, 66% of respondents claimed that participation in a payments program provided their company with the opportunity to decrease operating costs, and nearly 71% are more likely to buy from suppliers that offer a payments program. Most Important Decision-Making Factor For Program Participation Of Those Fleets Who Actively Participate In At Least One (1) Aftermarket Parts Payment Program
4. Parts Pricing. Fleets overwhelmingly identify parts pricing as one of the most important decision-making factors when evaluating suppliers. Implementation of standard pricing across aftermarket dealer networks, however, is tricky. The aftermarket sales model for truck parts and equipment is fairly consistent across the trucking industry. Original Equipment Manufacturers (OEMs) sell aftermarket parts to national accounts through a network with fleets, there is no model in place to consistently reinforce this pricing across the sales network. A payment program implemented across your sales network guarantees pricing to national accounts while maintaining a seamless purchase experience.
5. Purchasing Controls. 78.5% of fleets agreed that purchasing controls offered within their billing and payment solutions were important to their businesses. Procurement managers need to control company costs while protecting against fraud and account misuse. When trucks require maintenance while on the road, the ability to establish transaction volume or frequency limitations, purchase order requirements, or truck identification requirements prior to purchase authorization becomes a vital cost-management tool.
6. Consolidated Billings. 75% of fleets cite consolidated billings as a key program benefit. The decentralized sales structure of the trucking industry results in billings from multiple dealers in various formats with inconsistent transaction details submitted to national fleets, which are managing payments for purchases made by a multitude of truck drivers across the country. The time it takes to reconcile purchase orders with invoices and issue separate payments for individual transactions is expensive, though rarely quantified. Payment programs that consolidate the billing process minimize the amount of time national accounts spend administering payments - a benefit often overlooked by fleets until they’ve experienced the time-savings.
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8. Limited Sales Network.Allowing only an abbreviated segment of your dealer network to participate in your payment program creates confusion among dealers, fleet managers, drivers, and accounting departments rather than simplifying the transaction process.
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10. Multi Service. Innovation Where it Matters. Multi Service invoicing specializes in the design, implementation, and management of custom billing and payment solutions. The company collaborates with clients to isolate specific commercial credit and payment issues, identify measurable portfolio growth goals, and design a tailored private label payment solution to optimize customer loyalty. The company’s expertise in business-to-business sales processes assists clients in maximizing the lifetime value of individual commercial accounts and optimizing their overall commercial portfolio. Thank you for your interest in this free presentation. We welcome your comments, feedback, and suggestions. Please consider sending us a note about how this presentation has helped you. Check out the Multi Service Commercial Payments blog at multiservice.com. If would like to contact a private label business development analyst directly, you can call +1-913-451-2400 or email contact-private-label@multiservice.com.
