Reasons Businesses Should Implement Virtual Card Payments

The digital world generation rarely uses checks for their business and personal transactions. You will be surprised to find out that some people outside the finance industry transacted using a paper cheque back in the 70s. Also, banks have updated the steps required for processing payments. Advanced ERP systems are designed to output paper cheques seamlessly. You even don’t have to mail, stuff, or fold your paper cheques unless you outsource them to another department. In short, small businesses can eliminate old-fashioned payment processes by shifting to instant and electronic accounting systems. Here are a few ways companies can benefit from virtual credit card payments.

 

Streamlined Payment Processes

 

Virtual credit cards help eliminate manual-process inefficiencies and replace cumbersome and outdated paper checks. Single-issue virtual credit cards make the finance department focus more on financial responsibilities and less on processing payments. With virtual credit cards, the finance department no longer requires metering envelopes, stuffing cheques, and writing cheques. Besides saving time, electronic payments help eliminate or reduce human errors by streamlining accounts payable processes. In short, small businesses can combat challenges associated with old-fashioned payment processes by switching to virtual cards.

 

Cost Reduction

 

Transacting with a virtual credit card costs nothing. In fact, virtual credit card users are likely to earn cashback on their monthly transactions. In contrast, paper cheques can cost a mid-sized company a minimum of $3.5 to $ 5 per transaction. Larger companies can end up spending a minimum of $10 to $20 for every paper cheque transaction they undertake. Costs associated with paper cheques can include payment for envelopes, stock, or postage. There could also be soft costs of the labor and time required to post and stuff the cheques to the mail. However, migrating your payments to ePayment methods and virtual credit cards can help eliminate paper payments.

 

Earn Cashbacks on Monthly Transactions

 

No one would mind creating a way to earn extra revenue for their company. Paying suppliers and vendors using virtual cards is a great way to earn cashback. The more a business transacts using a virtual credit card, the more its cash backs.

 

Cash Flow Management

 

Managing the monetary requirements and cash flows of a business can be challenging. Companies might be required to pay their vendors and suppliers at an agreed period. However, during this time, delays might occur as you figure out what funds are available to the finance department. However, integrating your payment processes with a virtual credit card allows small businesses to manage their flow of cash using enhanced reporting. Virtual cards also ensure internal transparency through instant reconciliation facilities, making the entire payment department more productive and efficient.

 

Security

 

Virtual credit cards are a safer payment method than physical credit cards. Virtual cards allow cardholders to present their payments and tie their transactions to the invoices they are paying. Virtual cards are available with a 16-digit card number designed for single use only. These cards are also unique for each transaction. Your virtual card can’t be reused or stolen since it isn’t a physical item. Your virtual card expires once your usage limit is reached. Providing suppliers and vendors with an open bank and line of credit can help reduce the risk of fraud and theft significantly.

 

Gain More Control

 

The use of virtual cards provides companies with more control over their finances. Virtual credit cards ensure that funds are automatically deposited into the supplier bank account without manual re-keying and paperwork. Gaining more control over payment processes will make it easier for the accounts payable department to manage cash flow. Businesses in today’s competitive marketplace need to evolve by using advanced payment methods that contribute to their success.