Convention Center Discovers Much-Needed AP Efficiency and Cash-Back Benefits
AP Spend Analysis Demonstrates New Sources of Revenue from Cash-Back Incentives
Convention centers and venue managers around the nation are being challenged by the COVID-19 virus crisis. Some are discovering overlooked opporutunities in AP spend to reduce operational costs and benefit from material cash back from their significant commercial spending volume.
One of the largest convention destinations on the West Coast engaged Priority Commercial Payments to conduct an accounts payable analysis. Their goal was to uncover cost-reduction opportunities and identify how much of their annual accounts payable spending could be converted to rebate-eligible payment methods.
Priority Commercial Payments analyzed the convention center’s spend volume and various payment types against the suite of solutions available through Priority’s CPX platform.
Various payment types are eligible for rebates including a number of Visa virtual card solutions and an ACH+ payment option primarily designed for convention center suppliers with large invoice amounts. ACH+ is a method by which a supplier accepts a payment through ACH with a fee structure that is driven by basis points.
In addition to cash-back opportunities, Priority demonstrated that CPX is capable of automating and integrating 100% of the payments issued by the convention center, regardless of payment type, including: card, ACH, dynamic discounting, proxy payments, wire or check automation.
With little or no upfront start-up costs, and no changes to an existing accounting system, Priority’s single Payment Instruction File (PIF) makes implementing the Priority CPX solution a quick and easy way for convention centers and event venues to reduce inefficiencies, errors and reconciliation work associated with accounts payable. Even better, the Priority Commercial Acceptance team identifies the opportunity to gain monthly cash-back benefits on behalf of convention centers and event venues. Priority does the work!
– Annual Spend Targeted for Conversion to Rebate-Eligible Spend: 39% of Spend File
– Cash-Back Benefit with Participating Vendors: 1.1% (110 basis points) of Spend
– Benefit to Convert Check Payments to Processing Through CPX: $12,000 Annual Savings
– Estimated Annual Benefit (Savings) from Using CPX Integrated Payables: $100,000+
For this convention center, the analysis indicates that 39% of their annual vendor spend could be converted to a rebate-eligible payment method. In this particular case, Priority estimates that the convention center could realize a 1.1% cash-back benefit on the amount of spend with participating vendors.
Eliminating the burdensome process of preparing, approving, signing and mailing checks is estimated to save at least $5.00 per check which translates to a direct cost reduction for the subject convention center of $12,000 per year.
What is the bottom line? The analysis produced an estimated benefit of over $100,000 per year by moving beyond labor-intensive and disparate accounts payable tools to the CPX Integrated Payments solution.
The meaningful financial benefits through utilization of Priority Commercial Payments’ platform could enable organizations like this convention center to weather the business disruption and be better positioned in the rebouncd to invest in additional staff resources, cover operating costs or establish a rainy-day fund for future unexpected expenses.