Most of us use credit or debit cards all the time in our day-to-day lives, and credit card usage is a growing part of accounting practice for companies. Credit cards are convenient and make tracking payments a snap. But just as individuals worry about the security of their credit card information, so do companies. Businesses have an easy solution: virtual credit cards (VCCs,) sometimes called ghost credit cards. VCCs are one-time use credit card numbers that are randomly generated and thus offer better protection from fraud.
But how do VCCs work, you ask? With a VCC, you set an amount limit, an expiration date, and the issuing company generates a 16-digit number. The payment works just like a credit card for the payee, and most companies can easily accept these payments. Because a VCC is single-use, it protects your actual bank or credit card information from being shared in the electronic transaction, meaning that criminals can’t intercept your information.
Even before the pandemic caused postal and office disruptions, companies were switching to electronic payment methods. The VCC is just one exceptionally convenient way to process payments without paper, mailing, or in-person office workers. A recent survey by Deloitte discovered that 82% of respondents stated that paying by card is faster, at 1.4 times the speed of using purchase orders, and 68% experienced a reduction in administration.
Clearly, there are efficiencies to using VCCs for AP or AR departments. But there are other advantages as well. Electronic payment methods give accounting departments more robust internal controls, more transparency, and better cash management. The whole process is faster than checks or wire transfers. In addition, many VCCs offer cash rebates, which can generate income. That’s right, producing earnings in the AP department! Not just saving money, but generating revenue from a department that usually is just a cost center.
All of the major credit card companies are now offering VCCs as part of their business services, and a growing number of small- and medium-sized businesses are taking the plunge. The electronic revolution is coming, and because of all the upsides, and really, no downside at all, it makes sense to invest the time in switching over to using VCCs in AP and AR operations.
Scrypt AI offers end-to-end digitization for accounting departments, from invoice receipt and invoice coding to business payments with VCCs, transforming your AP department into an efficient, secure profit center.
