How Virtual Card Payments Automate AP and Improve Your Bottom Line

It’s not often that the Accounts Payable department gets to be a profit center, but virtual card payments not only automate the payment process, they can improve your company’s bottom line!

In today’s digital world, the use of paper checks for business or even personal payments is incredibly inefficient. The use of paper checks has plummeted in the past two decades as better, faster and more secure electronic payments arrived.

The steps required to cut paper checks are cumbersome. In business, your advanced procure to pay AP automation solution may process an invoice seamlessly – but with paper checks there’s just no getting around the signing, folding, stuffing, and mailing.

That’s why smart businesses have eliminated these old-fashioned steps by sending payments instantaneously and electronically with virtual card payment automation that works with any ERP or Accounting System.

What are Virtual Card Payments?

virtual card is a unique 16-digit card number that is created for a single-use between a payer and a payee. 

One of the obvious benefits of the virtual credit card is in it’s name: it’s virtual. And that means it’s highly secure – no physical credit card means no losing it or having it stolen and used fraudulently. Even better, the payer can predetermine the amount paid with a virtual card, further limiting potential for fraud. Many vendors and suppliers that accept credit card payments also accept virtual cards. 

In fact, in 2018 Mastercard surveyed hundreds of executives in leadership roles in accounts payable (AP), accounts receivable (AR), payroll, and finance management. They agreed that the utilization of virtual cards is one of the most cost-efficient, easy-to-use, and secure methods of processing ePayments today.

The article points out that the use of virtual cards has been around for some time now and continues to see exponential growth. Today, large as well as small businesses are discovering the benefits of using virtual cards for automated payment processing.

If you are is seeking a way to optimize your company’s budget, time, and resources, you should learn more about how virtual credit cards can automate payments.

How do Virtual Card Payments Automate AP AND Contribute to the Bottom Line?

Virtual card payments automate payments, streamline the accounts payable process, reduce cost and earn cash rebates!

They also improve security, internal control and help manage cash flow.

Let’s explore the benefits of virtual card payments.

the benefits of virtual card payments

Virtual Card Payments Streamline the Accounts Payable Process

The use of virtual credit cards can replace out-dated and cumbersome paper checks and the manual-process inefficiencies they create.

With single-issue virtual-cards, accounts payable departments can focus less on processing payments and more on financial responsibilities.

No more writing checks, stuffing checks in envelopes, and metering envelopes. In addition to saving time, you reduce or eliminate the risks of human error with a streamlined accounts payable process through single-issued virtual cards.

Since your AP department will be so efficient you’ll be able to pay invoices incredibly quickly. So why not have your AP staff spend the time they used to waste on data entry and cutting checks, contacting vendors to inquire about the possibility of early payment discounts? Or shopping for less expensive vendors?

The possibilities are endless.

Virtual Card Payments Reduce Costs

Virtual credit cards cost you nothing — in fact, you’ll earn cash back on spend with monthly rebates!

Paying by check costs a minimum of $3.50 to $5.00 for mid-sized companies and from $10.00 to $20.00 for larger organizations. These costs include supplies like check stock, MICR toner, envelopes, and postage.

Then you have to add the soft costs of the time and labor required to get checks cut, have them signed, folded, stuffed, and posted to the mail.

But with the right payment automation software, you can eliminate the majority of your check payments by migrating some payments to virtual Cards and others to ACH as a back-up ePayment method.

Both of these payment automation alternatives substantially reduce your hard and soft costs.  

And on top of all that, AP automation and vCards will make your AP department so efficient that you can qualify for early payment discounts, saving even more money for your company!

Virtual card payment automation saves money

Virtual Card Payments Earn Cash Rebates On Monthly Spend

Want to turn your AP department into a profit center contributing to the bottom line of the organization?

With virtual credit cards, your company can earn cash rebates while paying your vendors or suppliers!

For every dollar of virtual card payments, you have the potential to earn a cash rebate. So the more virtual credit card transactions you make, the more you earn back.

So by implementing payment automation with virtual cards, you will be creating your organization’s newest revenue stream.

But be sure to do your research up front before signing a virtual card contract. Most bank treasury programs don’t pay cash back monthly. They hold the rebate for payment annually or worse, they require that you hit a certain minimum before paying rebates. 

Virtual Card Payments Improve Security

Virtual credit cards provide much more security and protection from fraud than physical credit cards.

vCards allow you to preset the actual payment dollar amount and tie that payment to the invoices you are paying. No over-payments ever!

The 16-digit card number is unique for each payment and is for single use only. And since the card is not physical, it cannot be stolen or re-used. The card also expires after a time period that you decide and once the maximum dollar amount has been spent.

With virtual credit cards you don’t have to provide vendors/suppliers with an open line of credit. And you can rest easy when the risks of theft and fraud are significantly reduced with this innovative payment method. 

Virtual Card Payments Provide Internal Control

Companies gain more control with single-issue virtual cards. 

Each virtual card is issued to a specific vendor or supplier for a specific dollar amount. The vendor then processes the cards in essentially the same way as a traditional credit or pay card payment.

With this easy to use payment alternative, purchases get automatically entered into the supplier Accounts Receivable management system without additional paperwork or manual re-keying when the right virtual card program is used.

Along with more internal control, your AP department has visibility to credit and cash management.

AP automation saves money

Virtual Card Payments Help Manage Cash Flow

Managing cash flow can be a challenge. Especially in these uncertain times.

But your company has to pay vendors and suppliers or face late fees. So managing cash is a key to business success.

When you use the right AP automation including a Virtual Card program, the system allows organizations of any size to manage cash flow through enhanced reporting with data capture.

Easy, instant reconciliation facilitates improved reporting on cashed virtual cards for internal transparency. This process makes the whole department more efficient. And you no longer require a separate AP analyst to account for the different payment types.  

Bottom Line – How Virtual Card Payments Automate AP and Turn Your AP Department Into a Profit Center

In today’s economic climate, AP departments need to evolve by using procure to pay automation technology that can contribute to their company’s success. Simply choosing the right vendor and/or supplier payment method can enable that success. 

Join the forward-thinking companies that are already streamlining operations, reducing costs, and improving security through procure to pay automation.

Plus you’ll save paper, time, money, and provide added security for your payments by migrating to vCards. And best of all, your company will earn cash rebates for each transaction contributing real dollars to the bottom line.    

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