An AP solution helps this growing three-generation company create efficiencies.
Automation Generates Revenue Share, Maximizes Purchasing
Sukup Manufacturing | Sheffield, IA
Iowa-based Sukup Manufacturing Co. is a global manufacturer of grain storage, grain drying and handling equipment, and steel buildings. Despite its international presence, it’s important for this three-generation, family-owned company to partner with other Midwest businesses.
“Our customers are in the agricultural industry, which can experience ups and downs based on a number of factors such as the economy and the weather,” said Steve Sukup, president and CEO. “We want to work with organizations that are invested in the Midwest and understand our industry.”
When local Commerce Bank representatives approached Steve with an Accounts Payable product that could help Sukup create efficiencies, he listened, knowing the bank had a good reputation for developing meaningful business relationships throughout the region.
The AP product Steve was considering was the CommercePayments® AP Card, which came at just the right time for Sukup Manufacturing. As the company was experiencing significant growth, leaders were looking internally to identify operational efficiencies to keep up with the business demand. Virtual vendor payments would not only save time, but also create revenue share and provide a competitive business advantage.
AP Card provides a solution for a growing company.
Since its founding in 1963 by Eugene and Mary Sukup, Steve’s parents, Sukup Manufacturing has continually expanded its product line and grown geographically — at one point, its AP department was manually producing up to 40 checks every week of the year.
The CommercePayments® AP Card would provide Sukup a digital payment option to pay its vendor invoices, saving the company time and money by reducing the number of paper checks it produces. The real-time payment, working with its existing accounting systems, would also enable the organization to enhance its controls and reporting.
It was important for Sukup to ensure its vendors would accept virtual card payments. “I was surprised to learn that almost 250 of our existing vendors were already accepting CommercePayments® AP Card payments from other companies,” said Steve.
At that point, the decision to use CommercePayments® AP Card was an easy one. When a company signs up for the AP Card program, the Commerce Bank team reaches out to the organization’s vendors and proactively enrolls them in the program. Through Commerce’s ongoing enrollment process, now 350 of Sukup’s vendors are enrolled in the payment program.
As a flexible payment management program, AP Card allows companies like Sukup to pay suppliers on a regular schedule or make one-time payments and point-of-sale purchases. It provides benefits to vendors who can reduce accounts receivable collection costs, guarantee funds and potentially increase cash flow.
Revenue share positively impacts the bottom line.
A key advantage of virtual card payments is the ability for Sukup Manufacturing to earn revenue share with each payment, providing a new revenue stream for the company. The company’s revenue stream has steadily grown every year since implementing the CommercePayments® AP Card program in 2017, and in 2021, Sukup earned more than $165,000.
“Over the course of five years, the CommercePayments® AP Card created nearly $600,000 in revenue share for our company,” said Steve. “That money goes into products or systems that add efficiencies or value to our company to help us stay competitive.”
A competitive business advantage in purchasing.
In addition to operational efficiencies and revenue share, the CommercePayments® AP Card provides purchasing power for Sukup Manufacturing. The automated system provides detailed payment reporting, enabling the company to better track its purchasing. Additionally, the AP Card gives Sukup an advantage when negotiating purchasing contracts by offering an instant pay option in return for lower prices or pricing terms.
For more information on how AP solutions can pay you as you pay others, contact a CommercePayments® representative today.