Many companies rely on credit cards to facilitate business transactions because they are faster and easier to use than physical cash or checks.
However, exposing the company's credit card details online or to suppliers may invite fraud that can take a toll on the company's coffers.
An alternative to avoid this issue is using business virtual cards. These virtual cards comprise a temporary 16-digit number, a CVC, and an expiry date. The cards are not traceable to your bank account and let you set a maximum spending limit. All these features mitigate the damage fraudsters can do to your company.
In this article, you will learn how your company's finances can benefit from using business virtual cards in day-to-day transactions.
Benefits of Virtual Cards
More control over spending
Companies with traditional reimbursement systems only know which expenses they incur once the employee submits an expense report. Virtual credit cards circumvent this issue through spending limits and budgets for each account. These mechanisms help you keep tabs on the amount and purpose of business spending in real-time.
Automation doing all the heavy lifting
The expense reporting process can be too complicated, which leaves many employees procrastinating until the last day of the cutoff. Manually categorising every item is not only time-consuming but also prone to errors.
Plus, virtual cash cards are manageable because they automatically assign expenses to appropriate categories. These cards also support automated reporting that anyone can access via your accounting software to simplify the overall process.
Reduces risk and minimises damage from fraud
A virtual card can protect your business from fraudulent transactions and other security risks. You can activate or deactivate virtual cards to protect your company's information and utilise merchant locks to prevent unauthorised access.
Makes purchasing easier for employees
Employees with a virtual card can use it to purchase online or in person. They'll be able to spend up to a specific, pre-approved amount per month. These features make purchasing easier for employees and supervisors alike because there is no need for time-consuming administrative work—making the budget request, getting it approved, releasing the money, and more so to speak.
6 Use Cases of Virtual Cash Cards for Businesses
Manage your budgets across teams with ease
Virtual cards help you create, manage, and share virtual card numbers for a team member who needs one. You can then easily monitor that team member's spending and ensure they stay within budget. Setting a spending limit for purchases is easy with Spenmo's virtual cards, preventing employees from overspending.
Set one virtual card per merchant
Another way to protect your finances is to set up one virtual card per merchant. This layer of protection is your safety measure against suppliers who might use your business card details for fraudulent activities. The monetary limits set for each account also mitigate the damage of exhausting your credit and dealing with aggressive suppliers during collections.
Upgrade your petty cash fund
Businesses using physical cash for their revolving funds often need more support regarding their purchases, unlike digital means that make online shopping possible for most items. Upgrading to a business virtual card will open your doors to digital products and e-commerce suppliers that can help take your business to the next level.
Monitor subscriptions and campaigns
Your business might have subscriptions to pay monthly or annually. Virtual cards remove the hassle of managing multiple payments for several subscriptions since you can fill the card with funds that will automatically pay for each subscription service
Double as an employee expense management tool
Some virtual cards serve as an expense management tool, providing spending analytics and other financial reporting data. You do not want to end up with anyone overspending or making unnecessary purchases, so this feature helps you know how much money employees spend and where.
Act as a business travel card for employees
You can use a virtual card to book flights, hotels, and even transportation for employees representing you in business events or trips. Company representatives and executives can better appreciate and be more productive in their business travels without worrying about running out of company funds or using their finances.
Going Virtual: The Next Big Thing
The use of physical cards is still relevant today. However, business virtual cards may be the next big thing, especially for companies that regularly transact with vendors and suppliers. Virtual cash cards are also more secure and can analyse how much your company spends and where the money goes.
Spenmo offers both physical and virtual corporate cards. Simply set-up an account with our friendly team and get your card instantly! Spenmo clients save more than 50 hours and $10,000 every month through its robust expense management system. Book a demo with a representative today to learn more!
*Disclaimer: This article is for general education purposes only. Spenmo does not make any representation, assurance, or warranty, express or implied, as to its services or products offered in this article. For the avoidance of doubt, Spenmo does not purport to issue any credit cards and issues only business corporate cards, which function as debit cards.