Commentary: How national account billing can help during the pandemic
Fleets have been working hard this summer to improve business resiliency and the safety of maintenance technicians, drivers and shop staff. Here’s one thing you may not have thought of that can improve your resiliency: using national account billing for key fleet procurement programs.
While national account billing is a familiar subject, you might have decided against it in the past, or you might not be using it across all major spend categories. Either way, COVID-19 has elevated the business case for national account billing, and both medium and large fleets should re-examine the ways it can help.
Here are three ways it can support your operations during the pandemic:
Increased staff safety
With pre-established account credit, product pricing and bill-to information, buyers minimize the need to interact face-to-face with staff at dealer/distributor locations. Spot buying, on the other hand, almost certainly will require additional time “at the counter” to manage the purchase.
Drivers are in the most vulnerable position right now. Every stop exposes them to unpredictable environments with uncertain measures to protect them against illness. An on-road breakdown is likely to lead the driver to an unfamiliar service location. With national account programs established for all of your major fleet spend categories, you can help your drivers minimize the stress and risk of handing an emergency, on-road service event.
Lower AP workload
Chances are that your entire AP department is working from home. Depending on the level of invoicing automation that your business has in place, AP staff still are struggling to adapt to the logistical nightmare of receiving, reviewing and approving invoices for payment.
With national account procurement, your invoices are centralized and paperless for easier AP processing. In contrast, fleets that leave purchasing decisions to the local level will have paperwork coming from more senders in an unpredictable, non-standardized manner. A good national account program will include the ability for your AP department to electronically retrieve and approve all invoices coming from all purchasing locations. National account billing also reduces dispute events because invoices will be standardized to meet your AP team’s requirements. The best national account programs also will include price auditing to ensure your pricing complies with the rates negotiated under your program contracts.
Consolidating each spend category across all of your fleet’s locations into a single procurement program is a basic recipe for better pricing. Unfortunately, fleets often struggle with contract compliance across all shop locations. Off-contract purchasing at a few locations endangers pricing for the whole fleet. Procurement managers must keep their national account program in mind when confronting maverick purchasing behaviors. By controlling off-contract fleet spend, also known as “tail spend,” procurement can realize an average savings of more than 7%.
In addition to aggregating volume to improve pricing, national account programs can help fleets running predictive maintenance analytics. Maintenance analytics are critical for controlling total cost of ownership, and often the underlying service and repair data is pulled from vendor invoices. Under a national account billing program, invoicing data is centralized and standardized for use by your analytics tool.
Bill McCouch is Senior Vice President of Procurement Services at Corcentric. With over 40 years of transportation industry experience, McCouch oversees Corcentric’s fleet sales and operations teams and manages more than 1,600 fleet procurement relationships.