In today's digital world, receiving a paper check seems like something out of the Stone Ages. Not only is there a significant lag time before the check is transferred from Payer to Payee — there's also the daunting task on the receiving side of getting deposited either via electronic means or good old-fashioned driving it to the bank.
What if you could eliminate these seemingly prehistoric steps to receive and send payments instantaneously?
What You Need to Know About Virtual Cards
A virtual card is a 16 digit unique card number is one that's created solely for single-use. One benefit of a virtual credit card is obvious — it's virtual — and therefore, it has top security. Protecting all businesses. As the Payer, you predetermine the amount paid.
And, as an added benefit, virtual cards are widely accepted by almost any vendor or supplier that accepts credit card payments.
We're not alone in referring to the seemingly "Stone Age-nature" of check issuance and touting the benefits and growth of virtual cards. As noted in a recent article in Forbes, a survey by RPMG shows that 25% of the Fortune 100 companies used card-less accounts in 2014, with monthly spend averaging $330,698.
It says that the use of virtual cards has been around for some time now and continues to have exponential growth in the years to come as more businesses (large and small) discover the benefits.
If you're seeking ways to optimize company time and resources, you're likely itching to hear more about how virtual credit cards will impress your executive team, especially your Controller or CFO.
But before you break this exciting news to the higher-ups, take the time to ensure you know the difference between purchasing cards vs. virtual cards. If you're new to the virtual card territory, there may be some misconception that the two are the same. They are not.
5 Reasons Your Company Should Switch to Virtual Cards:
- Streamline accounts payable process
- Earn cash rebates
- Internal control
- Manage cash flow
Streamline Accounts Payable Process
Using virtual credit cards replaces cumbersome paper checks and associated process inefficiencies. With single-issue cards, accounts payable departments can focus less on processing payments and more on financial responsibilities. No more writing checks, stuffing checks in envelopes, metering envelopes.
Besides saving time, you reduce or eliminate the risks of human error with a streamlined accounts payable process through single-issued virtual cards. A/P departments can combat the challenges in the accounts payable process with virtual cards.
Earn Cash Rebates
Wouldn't you be the company hero if you created a way for the company to earn extra revenue (cash) while you do your job? With virtual credit cards, your company can earn cash rebates while paying your vendors or suppliers. For every vendor you make a payment to, you have the potential to earn a cash rebate.
The more you use virtual credit cards, the more you earn back. It will thrill CFOs to create the organization's newest revenue stream.
Plus, your vendors will benefit as well!
Virtual credit cards provide more security than physical cards. By allowing you to set the exact payment dollar amount and tying that payment to specific invoices, the 16 digit card number is unique for each payment and is for single use only. A virtual card, inherently, cannot be stolen or ever re-used.
It also expires once the maximum dollar amount has been spent.
CFOs will also appreciate the benefit of not having to provide vendors/suppliers with an open line of credit, knowing now that the risks of theft and fraud are significantly reduced with this innovative option.
Companies experience more control with single-issue cards. Each virtual card is issued to a specific vendor or supplier for a specific dollar amount. The cards are processed by the vendor in the same way as the traditional credit or pay card payments without a physical card or open line of credit provided.
With this easy-to-use payment alternative, purchases get automatically entered in to the supplier accounts receivable management system without additional paperwork. Along with more internal control, the CFO will appreciate that the accounts payable (AP) department has visibility to cash management.
Manage Cash Flow
It's often challenging to manage cash flow and the monetary requirements of a business. Companies have to pay vendors and suppliers a required payment during an agreed upon time frame.
During this time, things n get a little fuzzy when trying to determine what funds are available from AP. Virtual cards allow organizations of any size to manage cash flow through improved data reporting with enhanced data capture.
Easy, instant reconciliation facilitates improved reporting on cashed virtual cards for internal transparency, which makes the entire department much more efficient, now that you don't require a separate A/P analyst to account for the different payment types.
Ready to Make the Switch?
In today's economic climate, it's important for businesses to develop further by using technological enhancements that can contribute to your success. And simply choosing the right vendor or supplier payment method is an enabler of that success.
It is only a matter of time before awareness spreads from those early adopting companies who are already reaping the benefits of virtual cards, to small and large companies alike. They save paper, money, and provide added security for your credit payments... not to mention that they earn cash rebates for each transaction and contribute to the payer company's bottom line.
Find Out More About Automated Accounts Payable:
- Which Should You Use? Purchasing Cards or Virtual Cards?
- 6 Great Reasons for Accounts Payable Virtual Card Payments
- How to Revolutionize Your Business With Virtual Card Payments
- Knowing When to Use a Purchasing Card vs. Virtual Card
- 4 Virtual Card Myths (and the Surprising Truth)
Updated for content and quality February 10, 2021.