If you want to show your accounts payable (AP) team some love this Christmas, get them something that’ll make a real difference to their daily lives: a card.
No, not something with a robin in the snow or “Seasons Greetings” on the front. We’re talking about adopting virtual credit cards for company expenses, which are probably the single biggest stress reliever for overworked AP professionals. But virtual cards aren’t just for Christmas: they bring year-round benefits, transforming the tortuous task of tracking and approving expenditures across the company into a fast, painless process that ensures you’re always in complete control of every penny of corporate spend.
Not-so-fantastic plastic
As consumers, we’re constantly told to reduce our dependence on plastic. Physical payment cards may not pose much of an environmental problem, but they still create their own special kind of workplace waste.
When workers are given a corporate card, even the best-intentioned can make mistakes or slips of the memory that make life a nightmare for the AP department. While businesses might worry about the rogue employee who goes on a massive illicit spending spree with their newfound wealth — and this does happen — simple carelessness is a far bigger headache for most businesses.
There’s the hassle of having to cancel and replace lost and stolen cards, of course, which results in the payments team having to update every merchant account and recurring payment with the new details. But just as time-consuming is the tedious business of chasing up missing receipts, matching mystery charges to purchase orders, and ensuring every payment has been signed off and made with an approved vendor.
Let’s be clear: we’re not saying businesses should ditch plastic entirely. Physical cards still have their place, especially for travel and emergencies. But for most day-to-day spending they’re far from fantastic, being responsible for AP wasting hours or even days every month on reconciling card spend. That’s why businesses of every size are embracing the virtual card revolution and lifting the burden from overstretched AP teams, while still enabling employees to make purchases just as easily as before.
Virtually perfect purchasing
If you’re worried that virtual cards require a massive outlay on new systems and replacing your relationships with existing payments providers, rest easy. Virtual cards are simply unique credit card numbers that act as proxies for a physical card. Organizations use them in exactly the same way as they’d use plastic, by keying in the long number when making online purchases.
Virtual cards aren’t meant to be revolutionary at the point of use (they’d be somewhat self-defeating if employees had to face a steep learning curve to use them). No, what’s clever about them is what happens behind the scenes.
Being digital, they mean that managers not only have full visibility over payments that are made in real time; they can also set rules for what they can and can’t be used for. For example, some virtual cards such as Tradeshift Go enable businesses to pre-code purchase requests with a business justification and accounting code. This makes unauthorised spending practically impossible and, because this data stays with the purchase all the way through the accounting process, employees no longer have to worry about completing POs or retaining receipts.
For AP teams, meanwhile, it means they don’t have to worry about reconciliation or chasing employees for documentation; no more end-of-the-month races to find out where, how and why money’s been spent. Transactions just breeze straight through with enhanced remittance data, enabling accounting professionals to concentrate on productive and valuable work.
From a process point of view, they’re virtually perfect — and that’s even without considering the fact that they’re inherently more secure than plastic. That’s partly because they are encrypted, but also because they’re impossible to lose or mislay; meanwhile, virtual cards prevent business disruptions by creating unique payment streams with each merchant.
The imperative for control and visibility over spending explains why virtual cards have quickly become a multi-trillion dollar business: already, almost $2 trillion is being spent on virtual cards, and this figure is predicted to reach almost $7 trillion by 2026, a figure that’s driven by their obvious utility and the ease of implementation.
It might be a little late in the year to adopt virtual cards in time for Christmas, but make it a New Year’s resolution to speak to your accounts payable team about how they will transform their lives for the better. If you ditch the plastic for routine spending and go virtual, they’ll be thanking you for many years to come.