Business Credit Cards and Virtual Accounts: An Easier Way to Chart Expenses

From gas cards to debit cards linked to different accounts, you’re trying to do the smart thing and earn points and rewards. Yet, keeping track of them is exhausting.

Now that virtual accounts are the next hot thing in financial tech, it can be even more difficult to chart expenses.

But if you can nail down a process, the rewards and benefits are truly advantageous.

Here’s how to use business cards and virtual accounts to pay for things, like hotel bookings, and easily track your expenses.

Table of Contents

1. What Are Virtual Accounts?
2. Using Business Cards to Pay Your Way
3. Streamlining Your Processes
4. Simplifying Your Expense Charting
5. Layering Your Rewards with Engine

1. What Are Virtual Accounts?

Ads for virtual cards are dominating online searches and spam mail. These aren’t credit cards in the traditional sense. They’re a new type of payment option called a virtual account.

In the simplest definition, these companies offer users a virtual credit card. The card user gets a randomly generated number that lets them make their purchase.

Since this number is 16 digits and associated with the user’s bank account, it’s treated as a typical credit card by the receiving party.

Benefits of Virtual Account Management (VAM)

This may sound like a hassle for people who love the ease of storing their card info on their browser for one-click buying.

If it’s already connected to your bank account, and the money comes out directly, what’s the point?

Increased Security

Interested in protecting your assets? Isn’t everybody?

You’ll appreciate the extra security a virtual card provides. It’s especially helpful for business owners who have lots of hands in the pot of money, such as those who have to book hotel rooms for dozens of employees.

Instead of providing every service or lender with the same information, use unique virtual accounts. Each payment has a distinct credit card ID that you can only use once. Should any of the recipients get hacked, the card won’t work for a second transaction.

No More Fraud (Well, Almost None)

While we live in an era where fraudulent charges can get fixed quickly, it’s still a hassle. Then, you have to cancel the card and start over with all your purchases and payments anyway.

Using a virtual card number almost eliminates the chances of someone else getting access to it and making other purchases. Almost.

Although there’s a very slim possibility that this can happen with a virtual card, there’s still the major benefit of its unique ID. Tracing the breach back to its source is simple because there was only one point of purchase.

Cash Flow Tracking

Companies use this same idea to track their expenses and receivables. It can be time-consuming and difficult to verify incoming and outgoing payments when it’s all stemming from the same bank account.

With virtual credit cards, all you need is the order number or the card ID, and you can quickly see the charges and when they happened. The reconciliation processes of your account statements are much simpler.

Virtual Cards to the Rescue

Here’s an example. You’re a business owner who is sending dozens of employees to a conference. Each employee is booking their own transportation, but the company is paying.

Giving them all the same card information is a massive security and logistic nightmare.

Who knows where they’ll store the info, and who will see it? What kind of protection do they have on their computers? Will their personal device get hacked? When will they make the purchase? Who still hasn’t booked yet two days before the trip?

Virtual card management answers every question. It doesn’t matter who sees a card that can only be used once. If it’s hacked, it can be traced back. And you can quickly look at your physical account to see which cards are still open to see who hasn’t used theirs yet.

Tracking your cash flow and expenses through a virtual account number saves time and potential headaches. Confidently hand over a one-time card to others and delegate tasks that would’ve fallen in your lap previously.

Engine’s Direct Bill Program

Need to solve payment and fraud issues when booking lodging for your team?

Engine offers Direct Billing, which covers your team’s lodging and incidentals through a virtual credit card, and gives you one centralized invoice at the end of the month!

When you have to set up your employees with hotel rooms frequently, you’re spending a lot of hours inserting credit card numbers online or via fax and hoping the other party’s server is secure enough to protect against fraud.

And if the business card is declined for any reason when the employee tries to check-in, they aren’t happy that they have to use their personal card.

All of these problems become obsolete when you use Engine’s Direct Bill Program.

This convenient feature sets your company up with a virtual account that can be used to book hotel rooms. The typical “credit card holding” that is normally required upon check-in becomes this virtual account.

Essentially, the program extends you a line of credit to be used for hotel rooms and incidentals. You’re then billed monthly for the charges applied to the virtual card rather than paying for each individual hotel stay.

Keeping track of lodging for employees who can be sent all over the world becomes streamlined. And since the account is one virtual number, you don’t have to worry about fraudulent charges.

Related: 5 Best Tips for Avoiding Fraud While Booking Travel

2. Using Business Cards to Pay Your Way

Another option companies have to cut down security risks and make expense tracking easier is a business card. It’s a helpful financial service offered by lenders or banks designed just for companies.

The card is still connected to your commercial banking account. However, the features can be geared toward the business needs of your company.

Benefits of Business Cards

As with a virtual account, you can set up multiple card numbers to use for tracking expenses. For instance, you can use one card for company bills, another for gas purchases, and a third for employee use only.

Consider the same scenario we mentioned above. You’re sending your employees off to book their own travel again, but this time, they’re using a business credit card.

The security risk is still a bit higher than it would be with a virtual card. Yet, this card has its own identifier for tracking.

Extended Employee Freedom

You can use business cards multiple times without worrying about an interest rate or dealing with credit card payments. So, when you’re sending your employees off to do work, you can also give them their own company credit card.

They have extra freedom, with limits. You don’t have to reimburse them for expenses on the trip or deal with the per diem paperwork hassle.

You can track expenses in real-time, as you would with transaction banking. It opens the door to other cash management options that take away your essential role in otherwise easy-to-delegate tasks.

You get a little extra time freedom with a business card, too. You don’t have to micromanage every transaction and come up with a new virtual card for each travel need. Unlike with a virtual account management solution, you’re giving the employee the use of one card to cover the trip’s expenses.

Points and Rewards

Right now, many business owners like to keep their travel booking expenses in-house for reward purposes. When an employee makes the initial payment and gets reimbursed, the company loses out on those points and rewards.

You can set up business cards and virtual account structures to connect to your loyalty number. When you give your workers their payment info, the counterparties automate the information and apply the appropriate rewards to your number.

Accruing rewards and points in the act of paying expenses and booking has never been easier.

Layering Discounts

Points are a smart way to layer discounts in future bookings for lodging and other travel expenses.

Your business’s credit or virtual card collects points with purchases. By using separate, trackable identifiers, these are streamlined into your enterprise resource planning system (ERP).

The next time you plan a trip, meal, or other work-related purchase, you can use your ERP to see at a glance where you have accrued points. Then, you can use them before they expire.

Layering In Action

Let’s apply layering to our hypothetical employee trip. Your team has their credit card info in hand (virtual or business). They’ve handled their transportation, and they’re ready to book their lodging now.

Instead of grabbing the reins back so you can collect reward points and get discounts, you send everyone to Engine. The corporate travel booking platform includes HE Rewards.

HE Rewards is an in-platform program that lets members collect points for every booking. You can apply these points like cash to future stays, with no blackout dates.

At the same time, members add their brand-specific loyalty information, such as their Hilton Honors reward number. Every booking made through Engine gives you your hotel loyalty points and the Engine’s rewards.

It’s double the rewards on every purchase, and you didn’t have to do any of the work!

Read more about Engine’s Hotel Loyalty Program here.

Related: How to Choose Your Travel Rewards Credit Cards

3. Streamlining Your Processes

Using business credit cards can clean up the gaps in your current processes that are costing you time and money.

If you prefer virtual accounts, integrate your VAM solution to connect to your credit card information instead of your in-house bank account. Now, you get the benefits of both.

This form of expense management will:

• Let you set up recurring expenses and receipts
• Collect and track outgoing payments
• Decrease the time spent on receivables management
• Make it easier to create sub-ledgers to analyze your budget
• Give you a quick visual of payables to see if there are any cash flow issues to fix before they become problems

Making it a habit to use your business cards to pay all expenses is the first step. Once you do, you’ll see that balancing your statements is simplified. Since you pay everything via credit card, you only need to write a check to the card lender instead of one for each individual expense.

From tracking your working capital to monitoring employee spending, the chain of finances becomes more efficient.

You also get peace of mind from having increased security this way.

Credit card companies like Visa and MasterCard are considered legal entities that deal with treasury functions. If you register your credit card, it’s one of the “member FDIC”-backed financial institutions. ACH payments are currencies that are also protected.

Going through your credit card instead of directly to your bank account gives you an enhanced security buffer. If any accounts are hacked, the damage is limited to the business card rather than your working capital account.

You may also like: 5 Ways to Take the Stress Out of Managing Hotel Bookings

4. Simplifying Your Expense Charting

One of the first rules you learn when you start a business is to separate your personal and company expenses. This isn’t always easy to do as a startup, but it’s an important goal.

Using business and virtual credit cards is a natural way to ensure this segregation happens. The card issuer may even categorize your business expenses for you to help you track your spending. These reports are helpful for expense charting.

Other Useful Ways to Handle Expenses

Many businesses delegate credit cards to certain employees.

For example, if you have an office manager, you can grant them access to a card for daily necessities.

Because you’ve assigned a specific card to that person, you can track their spending anywhere in the U.S.A. In essence, you’re giving the employee carte blanche to make purchases without your approval.

However, they also know you’ll be monitoring their transactions periodically. They have the freedom to take care of in-the-moment expenses; you have less stress because you don’t have to handle every transaction.

Discover: 5 Must-Have Apps for Managing Business Travel in 2022

5. Layering Your Rewards with Engine

When you get the hang of using business cards and virtual accounts to pay for expenses, you’ll get hooked on the rewards you’re accruing.

The next step is to streamline how you use them to your advantage.

Sticking with one or two companies at first gives you the chance to learn in detail what they offer. In order to layer your rewards, you have to know the intercompany each system works with.

Engine Layering in Action

For instance, Engine is the only third-party platform that allows you to use outside rewards alongside their program.

Let’s take a step-by-step look at how our earlier example would work with layering:

1. You have a dozen employees heading out of town for a work conference. As the owner, you connect your business credit card to a set of virtual accounts for each person. This card also links to all your loyalty reward programs.

1. Every employee books their air travel through your preferred airline using their virtual card. You accrue reward points for each booking.

1. Then, they log into Engine and book their rooms through your preferred hotel brand. Again, you gain reward points for each booking, but you get them through the hotel and Engine.

1. The next time you need lodging, you’ll use your Engine reward points to get money off your reservation. You’ll also be able to use the hotel’s points to get discounts or upgrade your booking.

You’re not doing any extra steps. You’re just thinking strategically about how to maximize your spending and minimize your workload.

That’s why business cards, combined with Engine’s platform, make the most sense. You accrue double points and can pay everyone’s booking monthly instead of per reservation.

See also: 6 Tips for Getting Your Employees Onboarded with Engine

Conclusion

As with anything new, switching to virtual accounts and business credit cards takes time to flow seamlessly.

When you understand how to use and integrate both into your processes, the benefits will more than outweigh the beginning struggles. And when you see the results, like your mega discounts at Engine, you’ll be glad you made the switch!

Sign up for Engine’s free booking platform and start saving on business lodging today.

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