The days of grabbing the corporate card from the boss’s desk are over – it’s just not possible now that we’re all at home, and sharing card details by email is a major security risk. So how can teams and employees be empowered to spend in a way that the finance team can see and control?
Many finance teams are turning to virtual cards to facilitate employee and company spending in this era of remote working. The latest and most secure form of electronic payment, virtual cards can help to reduce processing costs, improve internal controls, minimise human error and facilitate the automation of account reconciliation processes.
As a replacement for the physical corporate credit card, virtual cards are revolutionising financial payments. They can help protect against out of policy spending and are proving particularly transformative for B2B companies, where very few payments are made face-to-face.
It’s a market that is growing rapidly; virtual card spend is projected to grow to US$355 bn by 2022, a 21% compound annual growth rate.
First, the technical definition: a virtual card doesn’t arrive as a piece of plastic, but instead lives inside an app or portal. It’s a randomly-generated, tokenised 16-digit card number which is linked to an existing credit account.
In the case of Soldo, that account is a prepaid card which your employees can use for online purchases – importantly, though, as it’s randomly-generated the card cannot be traced back to the original account by hackers. Perfect for remote spending
A virtual card presents a paperwork-free alternative to handling employee and company spend. It also means the cards can be recalled, re-issued, created and destroyed without involving any banks or third parties. You can even create a single-use virtual card.
When used as part of a cloud-based financial payment system, virtual cards can be created easily and assigned to employees for immediate use. Those employees gain access through a mobile app, where they can also upload receipts for claims; meanwhile, financial teams can manage the cards from a central dashboard and access real-time expense data for more visibility and control.
Each employee can have an individual virtual card for individual expenses but they can also have multiple virtual, non-nominative cards shared across other employees. For example, an employee may buy a new laptop for their home office on their individual virtual card (using the budget set from admins). They may use the virtual ‘team software subscriptions’ card to purchase Zoom. The budgets set for each person across multiple cards can be easily set and adjusted by finance admins.
Traditionally, corporate payments have had a handful of methods: physical cheque, bank transfers, corporate credit cards. Each of these brings a unique set of admin hassles and security risks. And, of course, once the transaction was complete, there was then a haze of receipts, expense reports, reimbursements, budgets and analysis – none of which was connected.
Virtual cards help to streamline corporate payments, making finance more manageable and more efficient. Let’s look at a few use cases as examples.
Since the pandemic hit, many companies have accelerated their digital transformation journeys. In 2020, companies were using an average of 80 SaaS apps. In 2021, this number rose to 110 – a 38% increase – and the UK SaaS industry in particular is expected to nearly double until 2025. That’s a lot of different subscriptions for each company!
The majority of these will require a credit card to be input before you can access anything – and, more than likely, it will be set to auto-renew, too. These subscriptions need careful management, lest you end up with duplicate or redundant subscriptions across teams.
Using a virtual card to pay for software subscriptions helps to keep track of spend.
You could allocate a virtual card to each team for their subscriptions, or even create a virtual card for each individual subscription so that you can easily track what money is going where. Or one virtual card for the whole company for subscriptions. You can set a budget per virtual card so that there is no unforeseen overspend, helping to protect your budget, too.
It can be difficult to keep track of digital media buying spend, particularly in agencies or companies where multiple accounts are run from a single expense system.
Instead, you could control your ad spend with a virtual card per platform, campaign or team. That means you could set a prepaid budget for Facebook spend per month and allocate a single virtual card to that campaign, or a single virtual card for all of the marketing team.
What about those one-off, small purchases that don’t need to go through procurement? Those things necessary for day-to-day working life, like purchases made online? Get visibility of all online purchases using a virtual card. Again, you can create a virtual card per employee or team for incidental expenses, or a card just for Amazon, and so on.
In this way, a virtual card can reduce the risk of fraud; the full visibility of each purchase means it’s easy to track any issues, and cards can be shut down with the click of a button – no need to wait on hold with the bank.
Having a single physical company credit card is no longer fit for the modern business; instead, virtual cards can bring control, clarity and insight for financial transactions at the touch of a button.
Employees get an easy-to-use solution that removes the friction of traditional expense management, while the company gets better visibility into expenditure and a more streamlined administrative process.
Soldo unifies every piece of the business spending jigsaw into one intuitive future-ready platform. Find out how Soldo’s virtual cards can empower your employees while giving the finance team greater visibility into the state of spending.