3 Ways Virtual Cards Reduce Headaches for Accounts Payable Teams

Everyone knows the expression, “you need to spend money to make money,” and indeed, spending money is a critical part of running a business. Businesses need supplies and services in order to support their operations, along with other expenses like payroll.

Spending can be broken down into multiple categories, and one that has emerged as a challenge for many businesses is accounts payable (AP).

Company spend can be broken down into payments that have already been made for a product or service, or payments that need to be made for a product or service already received. The second refers to accounts payable: you receive an invoice from a supplier or service provider and need to pay them, or you receive an expense report from an employee who has already spent personal funds and needs to be reimbursed.

For most businesses, wire transfer or ACH have been the go-to options for account payable, though that is beginning to change as new solutions become available and more and more vendors have begun accepting credit card payments.

Accounts Payable Headaches

While this may sound like a simple task for finance teams to manage, in reality managing accounts payable can introduce a number of challenges and pain points for finance teams.

First, accounts payable teams often need to spend considerable time resolving discrepancies in invoices, or understanding why the invoice doesn’t comply with the company policy. Second, employees often hand in invoices or expense reports late and this puts considerable time pressures on the AP team.

Additionally, current AP processes lack visibility into the payments being made and still require time consuming manual tasks and data entry. These factors also contribute to the considerable time accounts payable reconciliation requires at monthly close.

Fortunately, new solutions are available to AP teams to help them modernize their workflows. One option that AP teams are turning to are virtual cards. These share all the same attributes as traditional credit cards — an account number, expiration date, and CVV –  but only exist in a virtual format.

Let’s look at how virtual cards can help your AP team.

3 Benefits of Virtual Cards for Accounts Payable Teams

Faster Reconciliation and More Visibility into Payments

Virtual cards can help significantly improve reconciliation for AP teams, leading to faster close at the end of the month and reducing mistakes in identifying payments and invoices. With virtual cards, it’s easy to categorize payments, or search payments by vendor or vendor category.

In addition, virtual cards and spend management platforms can help provide much needed insight in your AP process. When payments are digitized, they become much more accessible and allow them to be analyzed for insights into the ways your business is spending money.

Automation and Elimination of Manual Tasks

Moving to virtual cards can help your AP team automate important tasks. Part of this comes from the way virtual cards and spend management platforms can integrate with your ERP, allowing payment information to be synced automatically along with receipts and invoices.

Automation helps to cut down on repetitive tasks and manual data entry, freeing up your AP and finance teams to focus on strategic tasks and keeping your company running smoothly.

No More Reimbursements and Expense Reports

One of the most annoying headaches that AP teams need to manage is dealing with expense reports and bothering employees to hand them in on time. Reimbursing employees for travel or other expenses is a hassle for them as much as it is for your AP team.

Virtual cards can provide a real alternative to reimbursement. Instead of having employees pay out of pocket, you can issue them a virtual card for the expense or trip they need to pay for. With virtual cards, you can customize the amount of money employees can spend, how long the card is active for, along with a number of other limits to ensure that spending stays on policy.

Additionally, receipt collection can be automated, helping to remove much of the hassle associated with reimbursing employees.

Accounts payable is a critical task for your finance team, but it doesn’t need to cause problems or frustration. Modern solutions such as virtual cards and spend management platforms can help you streamline this important process.

To learn more, sign up for a demo of Mesh Payments. With highly customizable virtual cards, powerful automation tools, and insight into your spend, Mesh can help streamline your AP workflow.

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