Commercial Cards: Benchmarking

How Does Your Company Compare in Generating Cost Savings?

If your card program isn't optimized, you may be leaving money on the table each year. The average Fortune 500-size public company saved more than $15 million in operating costs and expenses in 2014 by maximizing their commercial card program, according to RPMG.

So how does your company compare in generating cost savings? There's a quick and easy way to find out—benchmarking.

Benchmarking can help you measure your current cost savings and success against peers in your industry. Here are answers to questions that many of our clients ask us about the benefits of benchmarking.

Why should I consider benchmarking my Silicon Valley Bank commercial card program?
Information provides insight. Until you measure the size of your program, you don't know what you don't know. For example, are you keeping up with other companies of similar sizes? Are there opportunities for bringing down costs? Can you turn an expense center into a revenue producer for your company?

How is the benchmark constructed?
The benchmark is based on responses to RPMG's annual purchasing card survey, including in-depth interviews with more than 1,000 companies of all sizes and across all industries.

How long does it take to generate a benchmark report?
Your Silicon Valley Bank Treasury Advisor will give you a few short questionnaires to complete and may ask for some information related to the purchasing history of your firm. You can often gather the needed information in 30 minutes or less. Your Treasury Advisor will then do all the legwork to generate your report using a set of secure online tools, including SmartOptimizer from MasterCard.

What can I do with my benchmark results?
Your benchmarking results can help start a conversation about how and where you can optimize your card program to reach your specific goals. Every company may have slightly different needs and goals for their card programs. Starting with a basic benchmarking report can help you chart a course toward your objectives.

Where do opportunities typically lay for increasing card usage?
First, Silicon Valley Bank can help you identify your top vendors by annual purchase amounts which can potentially lead to better negotiated rates based on volume of purchases. Second, Silicon Valley Bank can help identify which of your vendors accept MasterCard and share some key insights into areas of card expansion. Additionally, Silicon Valley Bank can lead a vendor outreach campaign to your card-accepting vendors which can help increase card usage. And finally, you can use metrics generated by your report to encourage buy-in for your card program among top executives in your firm.

What kind of risks can a benchmarking program help me manage?
Setting goals for converting paper check payments to card payments via a benchmarking program can help reduce common forms of payment fraud. Setting controls for your card program can help prevent accidental or intentional card misuse among employees. And tracking spending habits through a card program can help reduce missed opportunities for negotiating volume discounts.

How often should I consider benchmarking my card program?
Benchmarking your card program annually can help you measure your success over time and stay up-to-date on how you are doing relative to your peers in the industry.

How much does a benchmarking report cost?
Your benchmarking report is complimentary with your relationship with Silicon Valley Bank. And failing to benchmark your program may be costing your organization millions of dollars each year in higher transaction costs and missed rebates.

Getting started
Measuring the health of your back-office operations can pay attractive dividends down the road in the form of enhanced card program rewards, lower costs and better control over company-wide purchases. To learn more about benchmarking your card program through SmartOptimizer from MasterCard, contact your SVB Global Treasury and Payments Advisor.

Added bonus
You can also discover more ways to strengthen your card program by listening to our recent webinar with MasterCard, "5 Ways to a Stronger Commercial Card Program".


The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which have not been independently verified by us; and, as such, we do not represent that the information is accurate or complete. You should obtain relevant and specific professional advice before making any investment or other decision. Silicon Valley Bank is not responsible for any cost, claim or loss associated with your use of this material.

All non-SVB named companies listed throughout this document, as represented with the various statistical, thoughts, analysis and insights shared in this document, are independent third parties and are not affiliated with SVB Financial Group.

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About the Author

Robert O’Connor is a Senior Advisor with Silicon Valley Bank’s Global Cash Management team. In this role, he focuses on developing credit card and payments solutions for clients.

Prior to joining Silicon Valley Bank, Robert was Vice President of U.S. Commercial Product Sales at MasterCard Worldwide. During his seven years with MasterCard, Robert worked with many U.S. commercial card issuers on developing their commercial card strategies. Robert’s previous experience includes various business development roles with U.S. Bank’s Corporate Payment Solutions and Merrill Lynch.