Virtual card transactions have risen by 11% since the emergence of Covid-19. Small businesses are increasingly adopting virtual payments to manage their expenses more efficiently. And it’s clear why. Compared to traditional payment methods, virtual cards provide better security, save you more money, and offer more flexibility.
The following tips will help steer you toward better expense management, by making the most use of your virtual cards. Let’s dive in.
- Require authorization for payments
Every penny counts for small businesses. Losing money from the incompetence of your employees can cripple your small business down the road, as the losses keep compounding. By implementing the right measures to secure your business, you can prevent this ordeal from happening.
According to a recent AFP Payments Fraud and Control survey, an alarming 74% of companies reported cases of payment fraud in 2020. To avoid graft headaches (and being part of this disheartening statistic), you can start by issuing virtual corporate cards to your employees.
Virtual cards are more secure. Unlike checks, they don’t link directly to your bank account. And unlike with credit cards, employees can’t lose them, so you don’t have to worry about them falling into the wrong hands.
That said, one way you can utilize your virtual cards fully is to authorize purchases. In this case, your workers will need your approval before making any payments. You’ll receive notifications to allow or deny any spending. You can also delegate this duty to other team leaders if you’re swamped with work.
Other ways to control business expenses include:
- You can limit the times a virtual card is used
- You can set a card to automatically lock after some time
- You can restrict payments to only specific company expenses
- You can limit the amount users can spend
- Manage digital advertising
Online advertising can help your small business spread awareness, reach targeted customers, and skyrocket conversions. But costs on Facebook, YouTube, and Google ads can quickly get out of hand, especially if you’re using traditional cards.
Issuing one virtual card for each platform reduces the chances of you overspending on online marketing. For instance, you can set a $2000 monthly budget for running LinkedIn ads. Once you reach your limit, your card will decline any further spending. LinkedIn will then suspend your ads until the next time your funds will be processed.
Alternatively, you can allocate a single card to your entire online marketing team. By encouraging responsible spending, you’ll inspire your team to discover more cost-effective ways of promoting your brand.
- Monitor subscriptions
Keeping track of all your company’s subscriptions can be a challenging affair. With constant monthly auto-renewals, you’ll find it difficult knowing when you’re being overcharged. Worse yet, too many subscriptions can pose a serious security risk to your company. Whenever a data breach occurs, you may have a hard time tracking its origin.
Allocating one card per company subscription makes tracking data breaches easier. It also helps you know when subscriptions increase in prices so that you can cancel them earlier.
Whether you’re buying online courses, enrolling for compliance training, or subscribing to project management apps, you can set limits to avoid draining your finances. Other features -- like card freezes, recurring payments, and card deletions -- ensure you’re always in control of your business spending.
- Automate reconciliation
Manually reviewing each transaction on your card statements can be a tiring and time-consuming task for your finance team. While having accurate records may be a satisfying reward, the process of compiling spreadsheets and analyzing each purchase can be painstakingly slow.
In fact, the process can last up to 10 days, according to recent studies. And the result may not be entirely worth it, either. In an MHR Analytics poll, 73% of FP&A professionals said that they were doubtful of their month-end close processes.
Thankfully, there’s a better way to ensure that each company expense is accounted for while saving time and money. With virtual corporate cards, each purchase is automatically uploaded to your accounting system. This feature allows you to monitor, record, and reconcile every transaction.
Automation ensures your books remain accurate, eliminating the human error from manual reconciliation. And with more accurate records, you save even more time, as your finance team doesn’t have to correct mistakes that would have otherwise cropped up.
- Use one card for every vendor
Using a single card linked to your account may present security concerns; maybe you’re transacting with a new vendor, settling an invoice from a new supplier, or simply paying for a new service. In such situations, you risk losing crucial financial data to dubious merchants.
That’s why virtual corporate cards are a great asset to small businesses. They allow you to create a new card every time you transact online. It doesn’t matter how many cards you own; they’ll all connect directly to your main bank account.
This feature reduces your finance team's workload, making it easy to keep track of all minor transactions. And if things go south, you can close your cards to prevent your vendors from charging you for future purchases.
For small business owners who often make purchases for their clients, this feature can especially come in handy. Suppose you do personal shopping for clients. By applying for a virtual card for each client specifically, you can keep close tabs on your spending. If your customer limits you to only $500 on their groceries, you can easily account for each purchase as you fill your carts.
Why choose The Penny Inc to be your virtual cards provider?
With Penny Inc, you can enjoy all the perks of virtual corporate cards. You can keep track of all expenses, automate your accounting processes, and minimize the risk of fraud. Whether you’re shopping for office supplies, booking hotel stays, or planning company events, our platform can help you gain control over your spending.
Penny Inc allows you to assign as many virtual cards as you want to your employees and vendors, and you can set budget limits and freeze cards. And the best part? It’s completely free. Sign up for a virtual card with Penny Inc today.