Travel and Expense
Getting the Most Out of Virtual Cards for Business
Organizations that keep up with trends that improve productivity are more likely to maintain their competitive edge.
One such trend is using virtual cards for business. You may be familiar with plastic corporate credit cards, but virtual cards can offer new features and advantages. This blog post will help you better understand what a virtual card is, how to use it, and the benefits it can offer your company.
What Is a Virtual Credit Card?
Imagine a corporate card that exists only in cyberspace. No plastic. No wallet. That's a virtual corporate card. It’s a digital payment method you can use to cover online transactions and manage accounts payable with ease.
How Do Virtual Cards Stack Up Against Regular Credit Card?
Virtual company cards have some of the same features traditional plastic credit cards have. They have card numbers and a credit limit. You can use them to pay for various expenses, invoices, and products, and they are widely accepted by vendors.
Virtual cards are different because they exist only online. You can't touch them or put them in your pocket. In addition, virtual cards have account numbers that expire after a set time, which can help increase security.
How Do I Pay with a Virtual Card?
Using a virtual corporate card for an online transaction is simple and very similar to using a traditional credit card online. First, you get the account number, expiration date, and other details from your financial institution. Then, you enter the details with the vendor or seller you're paying and wait for confirmation that the purchase has gone through.
The vendor will provide the same receipts and confirmations as if you had used a traditional, plastic credit card to make the purchase
Why Go Virtual?
A virtual credit card can offer numerous benefits that a traditional credit card doesn't.
Streamline Financial Processes
Processes that make accounting more seamless while keeping it accurate and traceable are good for business.
- Credit card reconciliation. Wave goodbye to manual tracking. Virtual cards sort your transactions and offer detailed spending data, making it easy for your accounting team to keep tabs on where money is being spent.
- Cash flow management. With real-time expense tracking, you can see a more accurate picture of your finances at any time. This approach allows you to make decisions based on more current financial information.
Example: Your company needs to tightly manage its budget due to an upcoming product launch. You need to make strategic decisions based on the latest financial data. Virtual cards provide real-time tracking of all business expenses as they happen. You can see the spending on each card as it happens, allowing you to monitor your budget in real time. This immediate insight lets you adjust plans in real-time, ensuring that you're not overspending.
Enhance Security
Safeguarding sensitive information is a top priority for every business. One of the most significant benefits of virtual company cards is the security they can offer.
- Minimize fraud. Using cards with single-use card numbers can help minimize risk if the card is lost or stolen. Since physical credit cards have unchangeable numbers, they can be used repeatedly.
- Decrease card theft. The chances of someone stealing a virtual card are minimized by the lack of a physical card, which can easily be picked up from a desk drawer or wallet.
- Customize controls. You can set card limits, specify merchant restrictions, and define usage requirements. This level of control protects company funds and reduces the risk of unauthorized usage.
- Maintain compliance. Transaction records and detailed reporting features give the finance team the information that they need to increase compliance and prepare for audits.
Example: Each time your company’s business travelers need to book a hotel, they use a virtual card generated specifically for that transaction. This single-use card number expires after the booking is complete. Even if a cybercriminal intercepts the transaction, the number is useless afterward, drastically reducing the risk of fraud. This is especially useful compared to a traditional physical card, where the number remains the same and can be reused maliciously if stolen.
Optimize Travel Expense Management
Travel and expense management is vital to a company's well-being. Managing it proactively and thoroughly keeps costs in line and helps companies avoid surprises. Virtual cards for business expenses can help create visibility.
- Simplify the planning process. Virtual company cards make it a snap to book flights, reserve hotels, rent vehicles, and pay for other travel-related expenses.
- Automated reporting. Uploading virtual purchases to the company's expense management system is a much quicker, less frustrating option. Plus, there will be no more inaccurate reports.
- Travel policy compliance. Tighter controls help manage spending and enforce travel policy rules, ensuring every employee manages their travel expenses by the policy.
Example: Your company is sending a team to a major industry conference. Organizing travel for a group involves multiple transactions for things like booking flights, hotels, and transportation. With virtual cards, you can allocate a card to the team leader or each member with a set budget. They can then use these cards to book all necessary travel arrangements online. Flights through one portal, hotel rooms through another, and car rentals through a third, etc. There's no need to float personal money or fill out lengthy reimbursement forms.
Strengthen Vendor Partnerships
Positive relationships with your company's vendors can contribute to your company's success. Clearing accounts payable is another benefit virtual company cards offer businesses, helping build trusting, long-lasting relationships. A virtual corporate card can:
- Pay invoices quicker. Vendors appreciate prompt payment. The accounting team's quick invoice payment could increase your vendor's goodwill and may result in better terms on future orders.
- Deal with fewer errors. A virtual card’s precise data capture and detailed transactions help minimize the risk of data entry errors and help keep account balances transparent.
- Enhance security. Greater security protocols protect sensitive information - for purchaser and vendor.
- Streamline interactions. Instead of waiting for the finance team to write a check or complete a bank transfer, a virtual corporate card payment can clear your company's balance almost immediately.
Example: Imagine your company frequently orders supplies from multiple vendors. Traditionally, the process involves issuing checks or processing bank transfers, which can take days to clear. Virtual cards pay instantly as soon as the invoice is approved. This prompt payment builds trust and goodwill, potentially leading to discounts or more favorable payment terms in future transactions.
Using Virtual Cards for Business Expenses Offers Many Advantages
Companies need to strive to stay efficient, keep information secure, and retain their competitive edge. One way is to embrace innovative solutions like virtual company cards. By streamlining financial processes, increasing security measures, and managing travel expenses and accounts payable reconciliation, you can reduce costs, improve accuracy, and strengthen relationships with your vendors.
Are you interested in learning how virtual company cards work with SAP Concur solutions? Reach out today to start a conversation.
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