If you’re looking for ways to save money as a business owner, virtual card cash back rewards are one of the best ways to do so. As a result, a growing number of consumers and business owners are transitioning to virtual credit cards. In fact, Divvy found that the usage of their virtual cards alone increased by 283% in 2020, with that number projected to increase.

Businesses specifically benefit from using virtual card cash back rewards as part of their accounts payable (AP) processes. This is largely because virtual cards transition payments from checks, wire transfers, and ACH to a virtual platform, enabling increased profitability. This essentially monetizes AP.

What Are Virtual Cards?

Virtual cards are simply credit cards without a physical counterpart. They consist of a 16-digit account number instead of a physical card. They function similarly to traditional credit cards in how people use them to complete transactions. 

Unlike regular credit cards, however, virtual cards are very secure. The reason for this is the card’s ability to generate unique numbers for every transaction, which protects the actual account number. These cards also generally offer more flexibility than physical cards. For instance, you can create new card numbers for various businesses, set certain spending limits, and instantly change the card number as needed. However, it’s important to keep in mind that virtual cards only work for some physical stores and over-the-phone transactions, with the majority of usage reserved for online transactions.

For businesses, virtual cards offer a certain advantage over physical cards. Because of this, accounting teams tend to favor virtual cards. Accounting professionals also like these cards for the numerous other benefits they offer.

The Benefits of Virtual Cards for AP

If you’re wondering whether it’s worth it to switch to virtual cards, the following are some of the key benefits of doing so.

1. Virtual Card Cash Back Rewards

One primary advantage of virtual cards is the ability to earn virtual card cash back rewards to help generate extra revenue. When paying vendors or suppliers, businesses earn cash back with their transactions. These rebates may seem somewhat minimal, but the right program can help save more money in the long run. 

Over time, virtual card cash back rewards can also increase, making it worthwhile to implement these cards instead of physical credit cards. 

2. Changed Numbers With Each Transaction

Another way virtual cards can help you save money and aggravation is by changing numbers with every transaction. As mentioned, a new 16-digit number is generated for each transaction, which helps protect the real account number. This helps minimize the chance of card fraud. 

However, it’s important to remember that virtual cards aren’t entirely invulnerable to fraud. Malicious parties could use an active temporary card number to complete a fraudulent transaction. This makes it best for cardholders to ensure they have sufficient coverage in the event of a hack or another attack. 

On the other hand, if you do suspect fraud and wish to report it, you’ll save more time by eliminating the need to change the account number, seeing as it’s consistently protected. You’ll simply have to close the current card number and produce a new one.

3. No Interchange Fees

Unlike physical credit and debit cards, virtual cards also come without interchange fees for transactions. Interchange fees vary based on multiple factors, including card type, industry, transaction type, and frequency. Using virtual cards, you can avoid those factors entirely with virtual transactions. This will enable you to continue completing credit card transactions without the additional cost of using plastic.

If you want to benefit from the implementation of virtual cards, Util Auditors makes it easy with our virtual card solution. Our platform enables you to identify the specific vendors and suppliers that accept virtual card payments.

4. Avoid Using Checks

Writing and managing checks is a time-consuming manual process that you shouldn’t have to worry about. With the help of virtual cards, you can replace paper checks and the specific processes associated with them. For example, you would normally have to write checks, place them in envelopes, and meter them. You can bypass all of these steps using a virtual credit card. As a result, your AP department will be able to focus more on managing finances than processing credit card payments. 

Checks also cost a lot more money than using virtual cards. The typical cost of checks is around $3.50 to $5.00 for mid-sized companies. Meanwhile, large businesses would ordinarily pay around $10.00 to $20.00 for checks. Additional costs associated with checks include expenses pertaining to envelopes, toner, check stock, and postage.

5. Improve AP Processes Overall

When switching to virtual cards, your AP department will already enjoy the benefits of eliminating checks and other hassles that tend to come with other forms of payment. Along with saving more time, you’ll also be able to minimize the risk of human error by streamlining the AP process with the help of virtual cards. This will increase overall efficiency while further saving time and money that would have been spent on potential mistakes.

Consider Implementing Virtual Cards for Your Business

With the benefits of virtual card cash back rewards and other advantages of this digital payment method, it’s worth making the switch to virtual cards. You’ll be able to move your business into the digital age. At the same time, you’ll be reducing costs and maximizing the efficiency of payment processing. In turn, your AP department will be able to devote more time to helping manage your company’s finances.

At Util Auditors, we can help you reap the rewards of integrating virtual credit card payments into your AP processes. Specifically, we achieve this through our virtual card platform. The first step for us is to receive an initial AP spend document. We can analyze this to determine which suppliers and vendors accept virtual card payments from other companies. This can help you effectively transition into a business model using virtual cards instead of more costly and less secure physical payments.

If you want to find out what kinds of hidden fees and other expenses are affecting your bottom line, Util Auditors can help evaluate your spending. By working with Util Auditors, you’ll be able to receive a complete audit of your billing and contracts to identify various inefficiencies and errors.