Upgrading Payment Processes to Save Time and Earn Rewards

Case Study: How Schneiderman’s Furniture upgraded to Virtual Card to save time, add fraud security and gain valuable rewards

July 27, 2021 |7 min read

Founded in 1948 in the small Minnesota town of Meadowland, MN, Schneiderman’s offers high-quality furniture in showrooms across the state. The company specializes in heirloom-quality furnishings and provides customers with the ability to customize pieces. Schneiderman’s is committed to providing customers with high-quality goods and exceptional service. It’s a commitment that starts with the valuable and trusted relationships the company builds with its suppliers.

The Move to Virtual Card

As Schneiderman’s growth accelerated, its finance team began looking for ways to update the company’s payment processes, reducing the cost of paying vendors manually by check. “We have had our share of lost checks and checks being sent and deposited erroneously due to manual errors,” said Nicole Morse, CFO at Schneiderman’s. “Our goal was to pay our vendors online with more certainty, timeliness and visibility. We also wanted to earn rewards in the process.”

Initially, the Capital One® Spark® Card program met all those needs. As Schneiderman’s began to shift more and more payments to card, it became clear the company should move to Capital One’s Virtual Card solution, which provides an expanded array of resources designed to support the more complex needs of larger companies.

“We wanted Schneiderman’s to benefit from the savings and efficiency as much as possible, not to mention help the firm maximize rewards,” explained Carl Koehn, Vice President, Capital One Corporate Payment Solutions.

Capital One Virtual Card: Transition Payments with Ease

Schneiderman’s began to pay its vendors with Virtual Card during its busiest time of year. “At first we thought it was risky to migrate payments during such a busy time, but all we did was provide our vendor list and a test payment file. Capital One took care of the rest,” said Nicole. “Any process that can take work off my plate is a huge benefit.”

Capital One runs a client’s entire vendor list through a match process to determine which vendors accept Mastercard. Capital One’s Supplier Enablement team will then contact vendors that are paid $10,000 or more annually by its clients to inquire about accepting card payments. At the end of the process, Capital One provided Schneiderman’s with a segmented list of vendors that:

Accept Mastercard® as a payment option at no additional cost
Accept card, but with a fee
Do not accept Virtual Card
Had incomplete or incorrect contact information

All of Schneiderman’s vendors that agreed to be paid by card were pre-boarded to the online platform, allowing the new payment method to be used right away. Brian noted, “We make it a priority to do the heavy lifting for our customers and migrate their payment process with the least disruption possible.” It was a smooth, seamless transition, allowing for payments to be made—and earning rewards—immediately.

Nicole remarked, “Now, paying our vendors with card is truly just a few clicks. We upload our payment details and get on with our day. We truly appreciate the simplicity of both the implementation and everyday use.”

The simplicity of the Capital One Virtual Card is complemented by the ability to pay vendors much faster and with greater certainty. The Accounts Payable team can easily track which vendors have processed payments and which are still pending. This helps Schneiderman’s manage cash flow based on vendor payment terms.

Schneiderman’s has been successful in converting both “business operations” as well as “inventory” types of vendors. Nicole shared that they even recently made a partial payment using Virtual Card to an auto dealership to purchase a new company service van. Adding to this success, not a single vendor has raised prices, and most have maintained existing discounts. A few even removed fees previously charged, as they receive payments much sooner with Virtual Card.

Benefits of Partnership

Ever since Schneiderman’s engaged with Capital One, there has been a high level of transparency and strong partnership. Nicole said, “Our sales manager keeps us on track and informed. It’s rare we need to ask for performance updates or status on a particular inquiry. Capital One is genuinely interested in our success and shares the latest new features and developments, including ongoing vendor enrollment strategies and updates on the new platform we will migrate to next year.”

The partnership has provided three main program benefits for Schneiderman’s:

Highly competitive and flexible rewards—In addition to benefiting from Virtual Card’s simple and intuitive platform, Schneiderman’s has earned significant rewards—all from the payments it would normally make. Flexible options allowed Schneiderman’s to choose the payment terms and corresponding point structure that best fit its needs. Plus, Capital One offers a number of rewards redemption choices, including travel, gift cards and cash back via a monthly statement credit. Schneiderman’s has chosen the statement credit option, which is reported separately as a cost reduction. The rewards program is a key driver for converting as many supplier payments to the Capital One Virtual Card program as possible. It’s even caught the attention of Schneiderman’s CEO, who is seeing the impact and pushing this initiative forward.
Improved payments visibility—Using the Capital One Virtual Card program has provided Schneiderman’s with confidence and peace of mind that vendors are paid on time. The company no longer has to worry about checks getting lost in the mail or sent to the wrong vendor. The online platform makes it easy to track and manage payments from the time payment instructions are submitted to the time they are processed by the vendor, providing Schneiderman’s with greater control and ensuring that each payment is completed.
Efficiency: Ease of Use and Simplicity of Payment—Virtual Card’s ease of use is particularly pertinent for Schneiderman’s CFO Nicole Morse, allowing her to have more control over the company’s working capital. Schneiderman’s closely monitors when suppliers process payment notices sent through the online system. From there, it determines the optimal time to initiate these Virtual Card payment instructions in order to maximize the float until the company pays Capital One. The platform allows the Accounts Payable team to input payment details and monitor payments in a fraction of the time it takes with checks, freeing up the team to focus on other critical duties.

Immediate First-Year Results

Schneiderman’s first year with the Capital One Virtual Card has yielded impressive results:

10% of Schneiderman’s vendors immediately began accepting the company’s virtual card payments
After the second vendor outreach campaign, the company saw a 119% increase in monthly payments moving from check to card. This means Schneiderman’s is achieving greater efficiency and control of its payments, and earning rewards on that spending.

Maximize Supplier Conversion Through Key Best Practices

In addition to the vendor outreach services provided by Capital One, Schneiderman’s has embraced best practices that are driving vendor conversion success.

Ongoing Campaigns: To address additional targeted vendors and try again with vendors that previously did not accept, Schneiderman’s plans to coordinate these efforts with Capital One through strategically planned campaigns over time.
Accounts Payable Diligence: The team continually scans vendor invoices indicating they already take card and sets them up through the online portal to pay with Virtual Card.
Post-Campaign Follow-Up: Schneiderman’s reviews non-accepting vendors plus those not responding and reaches out directly where there are established relationships—many times gaining a “yes” to accepting card payments. The company also monitors newly converted vendors to ensure those first few payments get processed and provides assistance as needed.
New Vendors: Schneiderman’s now leads with Virtual Card when offering payment methods and terms with new vendors and easily sets them up on the Virtual Card online portal.

The Future of Schneiderman’s Virtual Card Program

For Schneiderman’s, the main objective is to increase the percentage of vendors accepting Virtual Card payments. By its efforts, Schneiderman’s will:

Increase earned program rewards
Create even greater efficiency in Accounts Payable
Improve overall cash flow by maximizing payment terms with suppliers while using extended float from Capital One

Through its partnership with Capital One, Schneiderman’s is moving forward with confidence. Nicole said, “Capital One has helped us benefit from its highly competitive rewards program, all while enjoying the security of single-use Virtual Cards. We have significantly improved our ability to manage supplier payments and our cash flow position. This gives us the validation to continue expanding the program going forward.”

Take the Next Step

To find out how Capital One can help your organization streamline its payments processes, visit capital.one/corporatecard.

For Informational Purposes Only

The information contained herein is shared for educational purposes only and it does not provide a comprehensive list of considerations or best practices. This information does not represent any opinion, guidance or recommendation, whether formal or informal, of Capital One, National Association, or any of its officers, directors, employees, advisors, attorneys, consultants, affiliates or subsidiaries (collectively, “Capital One”). Nothing contained herein shall give rise to, or be construed to give rise to, any obligations or liability whatsoever on the part of Capital One.