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How companies use virtual cards for smarter, simpler online and ad hoc purchases
The Virtual Credict Card
Ad Hoc & Online Purchases
Why To Take A Closer Look
Challenge and opportunity for companies
Your marketing department wants to buy a video jingle on the internet, the IT department has to pay online for software licenses, and the strategy team needs a study for their work. No problem – except that most online providers of software, image materials, studies, training sessions, and many other products demand immediate online payment. Purchases like these are generally impossible to handle within a company’s existing procurement system. Employees often turn instead to their company card - or even private ones - which has many disadvantages for their companies.
There is no big-picture view of this kind of spending, there is hardly any way to monitor these purchases, and there is a lot of time and effort involved in reimbursing expenses after the fact – employees and accounting alike.
for these days business spending. They make it possible to digitalize, centralize, and monitor online and ad hoc purchases, plus they can have a positive impact on a company’s cash flow. This ebook takes a closer look at virtual cards and the possibilities they offer for smarter, simpler corporate payment.
Virtual credit
Cards can be the solution
The COVID-19 pandemic has forced many companies to seek out innovative approaches to the purchasing and payment processes that previously required a physical presence. Many companies still process invoices and payments manually – especially for ad hoc and online purchases. But when employees are working from home, there is no one on site to process invoices and order payments. The uncertainty surrounding how long the situation will last has also led companies to look for alternative sources of working capital.
at your ad hoc & online purchases
Why to take a
Closer Look
Cleaning services, tools, catering, IT hardware, and office supplies | Most companies with a purchasing department are well positioned when it comes to these kinds of recurring indirect purchases. Requests for proposals are organized, framework agreements are signed, and the volume typically goes to just a few suppliers. This has brought significant savings in some cases compared to individual order placement. So everything is under control, right? Yes and no. It would be, if not for the large number of ad hoc and one-time purchases, many of them made online, by different employees, from the office, from home, hard to plan for and predict – and most companies have a hard time getting them under control. There is no central way of paying, no overview of total spending, no way to monitor what is going on, and there are no suitable and efficient processes for approval, coordination, and payment. Plus, if the invoices are paid directly out of the bank account, it also has a negative effect on cash flow.
Hefty Costs
Even minor expenditures can incur
Negotiating and implementing supplier agreements has always been a key focus of purchasing departments. Especially at a time when growth is slowing, good supplier management helps to reduce and control costs, directly contributing to companys performance.
The potential of ad hoc expenses
Ad hoc Expenses for Cost Savings
But traditional supplier management reaches its limit when it comes to the ad hoc purchases made from many different suppliers, many of which are also only on a one-time basis. With ad hoc purchases, the factors that directly affect a company’s earnings are completely different:
Ad hoc purchases offer tremendous potential for cost reduction across a wide range of areas of the company. But is there a solution that actually meets the needs of all stakeholders (employees, the purchasing department, accounting and finance, treasury) and solves the challenges discussed above?
Yes !
Virtualcards,whicharedigitalcreditcards in the Mastercard® network, are accepted
virtually anywhere around the world.
Simplifying Processes So Employees Can Focus On Their Core Business
Improving The Ability To Plan For Costs
Optimizing Payment Deadlines (Over Invoices, E.G.)
Easy Reconciliation With Payment Metadata
Increasing Cash Flow
Minimising Risk
Centralizing Payment
Gaining Oversight And Transparency On Spend
Forecast of growth rates for commercial cards in Western Europe 2019 to 2024
Virtual Cards
P Cards
Corporate Cards
Virtual Cards
B2B Payments
with
136.0
94.4
133.7
145.0
157.91
Forecast for virtual cards: Strong growth rate of 30 %
Payments with traditional cards are growing at a much slower rate.
2020 figures reflect the impact of Covid-19.
The Virtual
Credit Card
Jack of all trades with huge growth potential
A virtual credit card is a 16-digit card number with a three-digit CVC code, generated at need. They can be used anywhere their providers are accepted and have particular benefits for online and ad hoc corporate payment.
The card number loses its validity after it has been used
What is a
Virtual Card
There are two types:
Multi-use
for recurring payments with the same supplier
Single-use
for one-time use
