The work-from-home trend has created a unique opportunity for virtual cards to become common practice in businesses today. Virtual cards not only offer a range of flexible features for all users but also help businesses manage their corporate spend more wisely.
Dan DeVall, VP of business development at Airbase believes that “80% of buyer-supplier transactions could be completed electronically by 2025”. As B2B transactions are becoming commoditized, the pivot towards virtual cards and employee empowerment for transactions becomes more appealing.
Employees are currently submitting 31% more expenses than they were pre-pandemic. Nearly all of these expenses are items and services used in work-from-home settings.
Below are five reasons why virtual cards not only help employees get their job done but benefit the organization as a whole.
Virtual cards help replace manual B2B payment processes like paper checks. Say goodbye to writing checks, sealing envelopes and metering them. This also helps eliminate any discrepancies that may occur due to human error. Accounts payable can now save time and energy to focus on their other financial responsibilities.
Better Cash Flow Management
Cash flow is one of the biggest challenges for small and medium businesses alike. Invoices are often paid late or the very last day they are due. Virtual cards can help improve the working capital of businesses, as payments are made instantly. Finance and accounts payable will no longer need to hold funds.
Employers can implement work-from-home onboarding allowances to satisfy their home workspace needs. This for example could be a figure such as a $1500 spending cap where employees could use their virtual card to purchase things such as their mouse, keyboard, and monitor of preference.
Another great way to empower your employees is by having managers give their team individual virtual cards to make required business purchases. The cards are issued to each individual team member and are unique with their own spending limit.
The spending limits allows management to keep a solid grasp on budget while allowing the team the freedom to spend what’s available. This eliminates the obvious bottleneck of employees having to ask their managers for approval for each purchase they make, maximizing spending efficiency while empowering employees.
At a B2B level, virtual cards can be assigned to vendors or suppliers with specific transaction amounts. Payments are then processed and a new card can be issued the next time payment is required. Accounts Payable departments can set up these assigned vendors and more easily control purchases.
Better Security & Fraud Prevention
One of the greatest benefits of a virtual card is the improved security over physical cards. Virtual cards cannot be copied or physically stolen. They can be set to expire immediately after use so no one can use it after the maximum dollar amount has been spent. They limit the amount of personally identifiable information by tokenizing your account numbers. A randomized token is made that can be used only to make one-time payments, rendering the token useless to hackers should it be stolen. Like other payment cards, if the card is compromised, it’s easy to simply freeze the account preventing any fraudulent activity.
Whether you’re looking to get a better grip on spending, create new efficiencies with accounts payable or streamline payments, virtual cards are a great solution. Especially in today’s work-from-home era, more than ever, virtual cards are essential to enabling employees to purchase what they need to do their job effectively.