A complete guide to corporate virtual cards for business

Corporate virtual cards may face limited acceptance with some vendors, especially those who prefer traditional payment methods. This limitation can restrict your business’s ability to use corporate virtual credit card universally, necessitating alternative payment solutions in certain situations.

Integrating virtual corporate cards with existing financial systems and software can present challenges. Your business may need to invest time and resources in ensuring that corporate virtual cards work seamlessly with accounting, payroll, and expense management systems.

Corporate virtual credit card are primarily designed for online transactions. If your business frequently requires in-person payments, the absence of a physical card can be a drawback, requiring you to rely on other payment methods for such situations.

The lack of a physical card can be a disadvantage for businesses that need to make payments in physical stores or during travel. While virtual corporate cards offer convenience for online subscription management, and are ideal for online transactions, they may not be suitable for all business scenarios.

Using corporate virtual cards means relying heavily on technology. Any technical issues, such as system outages or connectivity problems, can disrupt your ability to make payments. This reliance requires robust IT support to ensure continuous and reliable access to virtual corporate cards.

Create a comprehensive corporate card policy outlining the use of corporate virtual cards. Define acceptable expenses, reporting procedures, and compliance requirements. By establishing these guidelines, you ensure consistent use and prevent misuse across your business, helping maintain financial discipline and clear communication of expectations.

Implement spending limits on each corporate virtual credit card to control expenses effectively, including marketing expense management. Customize these limits according to roles and responsibilities within your business. This practice ensures you control spending and align financial management with operational needs, maintaining discipline and avoiding overspending.

Carefully manage who is authorized to use corporate virtual cards. Assign cards only to trusted employees, and regularly review and update authorization lists. This process helps you maintain control, prevent unauthorized use, and ensure that only appropriate personnel have access to the cards.

Use a centralized platform to manage all your virtual corporate cards. Ensure the platform offers real-time transaction visibility, easy card issuance and deactivation, and streamlined expense tracking. Centralizing management simplifies oversight and helps you maintain control over your business’s financial transactions.

Regularly monitor expenses made with corporate virtual cards. Review transactions frequently to identify any discrepancies or unusual activity. Staying vigilant ensures you are aware of your financial status and can address issues quickly, maintaining accurate records and preventing potential problems.

Train your employees on the proper use of virtual corporate cards. Educate them about your policies, spending limits, and the importance of accurate expense reporting to promote responsible card usage, ensure compliance with your business standards, and minimise the risk of errors or misuse.

Enforce spending controls by setting up automated alerts and notifications for transactions exceeding limits or falling outside approved categories. These controls help you maintain oversight, prevent overspending, and detect potential fraud, ensuring that your business remains within budget and secure.

Virtual cards do not propose the same kind of data loss risk that physical cards do. Since they cannot be swiped at a vendor or ATM machine, there is a highly reduced risk of hacked software getting the card information.

Additionally, since these cards can be linked to specific vendors without being attached to your company’s bank account, your banking information stays safe. Having a different virtual card for different vendors also lets you identify which payment gateway is posing a risk. Compliance teams can, then, track any issues without having to sort through a web of information.

While spending out-of-pocket can definitely be tracked, it is a very arduous process. There is always a risk of human error, misreporting, and paperwork getting lost. Spend management platforms allow for integrations with accounting software.

Your virtual card provider can let you link your transaction history with your software of choice. After that, it is simply a matter of integrating it with your card, and all your transactions are synced with the accounting system for the finance and compliance teams to go over.

Virtual card transactions get immediately recorded, with a real-time spend report being generated. Spend management systems like Volopay have web, email, and mobile applications for you to get notified every time a card is swiped and what the transaction information is. These spends can also be analyzed and synced with your accounting software in real-time.

This kind of transparency in spending patterns inculcates a healthier spending culture among employees, and also holds them accountable for all transactions. Real-time transactions also allow approvers to immediately respond to budget increase requests, verify uploaded receipts, and decline transactions.

All employees that spend company money can be issued a corporate credit card in their own name, which not only streamlines transactions but also enhances employee satisfaction by providing them with immediate access to funds. Since cards are linked to budgets, departments can also better track how and when their money is being spent, and how they can optimize their financial plans. Virtual credit cards don’t just make accounting faster - the actual transaction is quicker, too.

Since credit cards don’t require the same kind of sanctions as debit cards or wire transfers, cross-border and domestic payments are a lot smoother. There is also lesser risk and liability since the payment works on a credit basis instead of a money transfer.

It might feel scary to just hand over virtual credit cards to your employees, but rest assured this process is fully under the control of the company’s administrators. Virtual cards for business have the option to be customized in its usage rules.

You can choose which card can be used by which people, who approves any changes in the limit, and what the maximum allowed limit can be. All delegated approvers have the authority to decline expenses if the details provided are not sufficient. There are also auto-decline settings that help enforce financial policies.

The entire goal of expense management software is to streamline the process. Whether you rely on manual paperwork or data entry, it is still a lot of time and money wasted in managing your expense records.

This only gets further complicated when you need to create analysis reports. Digitized expense management and virtual credit cards can automate a large chunk of this process. Not only is the data less likely to become redundant, but it is also easier to perform any analytical functions on it.

Shadow spending or shadow spend is a phenomenon where procurement policies are bypassed by employees to enable purchases on corporate credit cards that have not been authorized prior to the purchase being made.

The best tool that can help prevent shadow spend is the virtual card. You can simply load the card with only the amount that has been authorized to be spent, so the question of overspending or unauthorized spending does not even arise because there will be no excess funds available.

Related read: 7 benefits of virtual cards for businesses