As COVID-19 pushed employees out of the office, online business transactions began to surge. But with a distributed workforce, spending became harder to control—finance teams lost visibility into what employees were buying.
Virtual corporate cards can enable finance professionals to manage company spend in the era of remote work. When paired with a distributed spend management platform, virtual corporate cards empower employees to spend quickly—without sacrificing security or compromising internal controls.
A virtual corporate card is an auto-generated card number linked to an existing credit card account. According to a Mastercard business payments survey, companies use virtual corporate cards to reduce costs and increase security.
Virtual corporate cards make it easy for remote workers to purchase online
Physical corporate cards simply weren’t designed for online purchasing. Virtual cards, on the other hand, were purpose-built for it. E-commerce was already on the rise pre-pandemic; now, it has exploded. According to a Juniper Research B2B payments report, “COVID-19-driven remote working” resulted in an 11% growth in virtual card transactions in 2020.
And remote work isn’t going anywhere. Even after COVID protocols ease, a PwC remote work survey suggests hybrid office arrangements will continue in the U.S. Half of the employees surveyed said they want to come to the office three days per week.
As employees moved out of shared offices, finance teams struggled to enforce internal controls. The Financial Executives International’s Committee on Corporate Reporting, whose members include corporate controllers and CFOs, said: “Many controls were previously completed in-person and required physical access to locations or products.”
Virtual corporate cards make it easy for remote workers to purchase what they need online, from wherever they are. And when paired with a spend management platform, these cards help finance teams proactively enforce purchasing policies and provide cleaner transaction data that is seamlessly passed through to the general ledger.
Furthermore, employees using virtual corporate cards no longer have to front their own money for business purchases and risk delayed reimbursements. “We don’t have to worry about chasing down receipts or how much money we have outstanding that we owe employees,” said Caitlin Cuesta, HR and Operations Coordinator at Lightstream.
Distributed spend management offers total control and visibility into corporate card spend
With the increase in remote work comes an increase in distributed spending – and a lack of control. Leveraging their autonomy and needing to move quickly, employees may make purchases willy-nilly, which can spiral out of control.
A distributed spend management platform can help solve this challenge by securing pre-approvals on all spend and issuing virtual corporate cards limited to the pre-approved amount.
A finance leader at Consensys, John Chard praised the spend controls he has over physical and virtual corporate cards. “Since we have so many cost centers, the ability to easily track spending while giving out one-time use (virtual) cards with built-in approvals and who is spending what is priceless.”
With distributed spend management, finance teams are able to monitor purchase requests and track expenses in real time. Real-time visibility is invaluable for finance teams previously stuck waiting until month-end to review corporate credit card statements and understand all the spend that has occured. When transaction data is immediately passed through to your accounting software as purchases occur, finance teams benefit from cleaner data and clearer audit trails.
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Virtual corporate cards reduce card fraud
Virtual cards come with greater protection against fraud. As there is no physical card, it cannot be lost, stolen, or skimmed. Because each credit card number is tied to only one vendor and amount, stolen card numbers cannot be used elsewhere for more expensive purchases.
If a card is used at an unapproved vendor, the distributed spend management platform will automatically alert you of the discrepancy. This allows the finance team to act immediately to investigate the purchase and cancel the card if necessary, without risk of additional fraudulent purchases.
Furthermore, if a card number is stolen, you can easily cancel that card without worrying that it is tied to other vendors. For example, if you need to close your CRM card, there’s no risk that the same card was also used to pay for cloud services. Thus, there will be no interruption in service due to canceled cards.
Distributed spend management eliminates manual reconciliation for all corporate cards
Typically, finance teams manually review and code transactions on credit card statements to close the books at month-end – a tedious and time-consuming process. According to the American Productivity & Quality Center, month-end close can take up to 10 days. Distributed spend management automates reconciliation, freeing your finance team to focus on more strategic work.
In the words of Sieun Kim, Senior Accountant at Branch, “We can reconcile all of our credit card accounts within a couple of days! Before Teampay, this process often took more than a week.”
Furthermore, MHR Analytics found that 73% of finance professionals were not confident in their month-end close processes, due in part to “chaotic datasets.” Manual reconciliation means human error, which causes inaccurate reporting and additional time spent retroactively correcting mistakes. With automated reconciliation, you can rest assured that your data is accurate.
In fact, distributed spend management requires employees to code their purchases upfront, so there is no need to fill out expense reports after the fact. This eliminates a whole other manual process that saves both finance and non-finance employees a ton of time.
“Our employees can get everything done for their purchases right off the bat and don’t have to deal with any kind of expense report or paper receipt later on – and that’s a great thing for us accountants because we can’t stand paper,” said Brenda Villanueva, Senior Accounts Payable Specialist at One Medical.
Issue virtual corporate cards via a distributed spend management platform
As remote work continues to grow, virtual card adoption will become a necessity. Virtual corporate cards are the simplest way for employees to buy the services or goods they need to do their jobs online. For finance teams, virtual cards issued by a distributed spend management platform provide complete control over spend and real-time visibility into company-wide purchases. The result? Finance teams have the freedom to pursue projects that add value to the business.