What is a virtual company card?
The traditional corporate plastic credit card has received a digital makeover. The days of time-consuming and rigid plastic are over.
Electronic funds transfers, automatic deposits and electronic payments are now the most convenient and common way for consumers and businesses to deal with money.
A number of corporates and fintech startups have utilised new virtual cards as a secure and paperwork-free alternative to handling employee expenses. The streamlined and flexible prepaid card has been embraced as a new innovative trend in business.
So what is a virtual company card?
Similar to a plastic credit card, a virtual card consists of a 16-digit card number, created solely for online transactions. It is ideal for paying for subscriptions or e-commerce transactions, for example.
Benefits of virtual cards
For businesses, the reasons behind the increase in the popularity of electronic payments are clear. As well as offering convenience, there are lower processing costs, improvement of internal controls, minimisation of human error and automation of account reconciliation processes.
Firms which leverage finance management technology find that profitability is improved even where rising business costs and competitive labour markets continue to pose challenges.
Virtual cards, such as those offered by Soldo, provide an improved user experience and simplify the process of managing company and employee spending while providing valuable insight. There is far more value in being able to see transactions as they take place, rather than after the payment is completed.
Virtual cards also offer real-time monitoring of transactions, providing increased awareness of fraud. They are usually more secure than traditional plastic cards, due to their one-time use or daily transaction budget. A thief that stole a virtual card would be restricted as to how much they could spend and where.
Virtual cards support the automation of account reconciliation and expense reports. By using Soldo’s control and reporting features, you can eliminate end-of-month surprise expenses for your finance team.
Without the rules and limits that can be set on the prepaid Soldo card, there could otherwise be substantial accrued expenses for the finance team to analyse.
Using the Soldo web console, you can view transactions in real-time, meaning that your finance team will never be caught out. Admins can instantly generate virtual Soldo cards for use in online spending.
Virtual cards can work seamlessly alongside other financial software to help manage company expenses. For example, the Soldo web console works in unison with major expense management software, such as Xero and can easily export data to accounting software such as Sage and Concur.
With the Soldo mobile app, lost or unreadable employee receipts are a thing of the past. Employees snap photographs of receipts using a smartphone and submit directly to your finance team, who no longer need to sort through piles of expense receipts, and the employee no longer needs to carry them around.
Addressing the drawbacks of credit cards
The move away from traditional plastic cards has been primarily down to their limitations. An expense report typically comes with dozens of vague receipts that must be found, sorted and categorised, wasting hours in finance team time – time that could be spent productively elsewhere.
With virtual cards, account details do not need to be shared between supplier and buyer, reducing the likelihood of fraud and theft. All that is required is the number of the virtual card.
Transparency in transactions is one of the significant advantages of using virtual cards.
Rather than employees reconciling transactions, the Soldo software handles these tasks, providing data of all transactions in real-time. With traditional business credit cards, the business must wait until the month-end to see transactions and expense reports.
In some instances, virtual cards can even be shared. For example, by assigning one virtual card to a specific cost centre. All employees know what budget is remaining in real-time, and no employee can go over that.
However, employees may still need physical cards for transactions such as hotel stays. Hotels often insist on keeping a copy of plastic cards on file for security.
Some restaurants and coffee shops may similarly require physical cards, but virtual cards are gradually becoming more accepted, eventually becoming part of virtual mobile wallets such as Apple Pay.
By using virtual cards, firms have real-time access to expense information, with analytics providing valuable insight into trends and patterns in company spending. Solutions such as Soldo can transform financial decision making and budgeting processes concerning expense management, driving improvements in profitability and predictability.
Why not contact us for more information.