Everything’s going digital these days. From music to books, the world is digitizing fast. How we spend money is following suit. In the 1950s, charge cards and credit cards were introduced and slowly came to be as commonplace as cash. Chip readers were recently launched to make cards more secure. What comes next? Virtual cards.
A virtual card is an add-on to a cardholder’s existing account. When they want to purchase something online (but don’t want the numbers on their physical card floating around), they can create a virtual card to be used as a stand-in. The virtual card is linked to the primary account, but no vendors ever see the primary account numbers. This gives cardholders an added level of protection from security breaches and hacks.
But as virtual cards become more commonly used for business expenses, cardholders are getting more and more creative with how they use them. If you’re not sure how a virtual card could benefit your business, read on. We’ve got plenty of ideas.
1. Monitor Advertising Spending
Virtual cards are, by nature, more flexible than physical cards. They don’t even have to be assigned to a specific person. Instead, they can be created to serve very specific purposes, like keeping an eye on advertising expenses.
Want to keep your Google AdWords® or Facebook® advertisements from going over budget? Create a virtual card for each and set a strict spending limit. Go ahead and put as many Facebook ad campaigns on one card as you want—the virtual card will allow you to keep an eye on the total spend in real time.
2. Encourage Teamwork
Shared cards that float around the office are bad news for everyone. Not only is it difficult for you to monitor expenses this way, but it’s also darn near impossible for your team to regulate their spending independently.
Creating one virtual card that can be used by several team members allows them to keep tabs on their shared expenses and work together to budget accordingly. Maybe that means your team works together to keep the office supply budget down when ordering from Amazon. Maybe your marketing team has a set amount for their quarterly campaign.
3. Skip the Petty Cash
Virtual cards can be created on the fly, meaning that you don’t have to wait for a physical card to come in the mail. Some expenses that you’d normally dip into your petty cash fund to cover might make more sense as a virtual card purchase. Can you order the item online and pick it up in-store? Put it on a virtual card and the transaction will be classified correctly in your bookkeeping.
4. One Card Per Client
If you ever find yourself making purchases on behalf of a client, creating a virtual card that’s dedicated exclusively to that client makes it easier than ever to stay on budget and even bill them later. A decorator, for example, might bill a customer later for the furnishings they’ve purchased. If the client expects them to stay under $5,000, the decorator can see exactly how close they are to that limit with each purchase.
Set it, and forget it. Whether you’re paying a monthly fee for project management software or online courses for your team, virtual cards let you put subscription payments on autopilot. Setting specific limits for these kinds of fixed costs means that you’ll know right away if pricing goes up.
6. Extra Security
This is a biggie, and it’s the main reason virtual cards got their start. Some corporate cards are linked to a business owner’s personal credit. If a data breach happens or an employee loses a physical card, your personal credit might be at risk. Virtual cards are a more secure way to pay for things. So protect your business—and yourself—from risk.
Note: The ScaleFactor Visa Card is not linked to a business owner’s personal credit score. Added bonus!
7. Encourage Fun
How do you budget for company culture? If you specify how much fun team outings cost down to the dollar, you might suck the fun out of the whole thing. But if you don’t provide guidelines, spending can snowball or expectations can get out of whack.
Consider creating a virtual card for each team in your company and giving them some budget for fun activities every month or quarter. Marketing may choose to spend their $500 at an escape room. Sales may opt to go out to eat as a team. Virtual cards give them the flexibility to decide and you the visibility into how much they’re spending.
8. Contractor Control
This one’s the opposite of #4. Sometimes you might be tempted to hand over your card to contractors that you work with so that they can spend money on your behalf. Especially if your personal credit is on the line, this may not sit well with many business owners.
A virtual card that can be shut down at a moment’s notice not only provides some added protection, but it also lets you keep an eye on how they’re managing your budget.
9. Host Events
Planning events can be a costly undertaking once all the expenses are added up. If your business hosts several events throughout the year, creating virtual cards for each event might help you keep track of all the moving pieces and ensure that each event stays on budget.
If a team member is debating whether to upgrade to nicer table linens, they can quickly check how close they are to their virtual card limit and make an informed judgment call.
10. Encourage Education (Coursera, Lynda, etc.)
Websites like Coursera, SkillShare, and Lynda.com are great resources to help your team develop new skills. Set up a virtual card dedicated to education and sign up for all the online course offerings you want to offer. Do you have a small team? You might also consider giving each employee an education-dedicated virtual card of their own to spend as they see fit.
11. Charitable Giving
Giving money to charity has positive ripple effects on your team and your community at large. If charitable giving is something you regularly do—or something you’d like to start doing—consider setting up a virtual card dedicated to doing good.
You might allow employees or managers to work together to decide how to divvy up the budgeted amount each month, or you might use the card to match employee contributions to their favorite charities.
Virtual cards have uses that extend far beyond the added security they bring to online purchases. Their flexibility means that business owners can get creative with how they budget and how their teams manage expenses.
Can you think of other uses? Learn more about the ScaleFactor Visa Card today and tell us how you’d put it to use in your business.