Virtual cards bridge the gap between buyer and supplier needs. Giving buyers the ability to optimize their working capital by holding onto cash as long as possible, virtual cards also enable suppliers to get quick, reliable payments.
However, despite the many advantages, virtual cards have not yet been widely accepted, primarily because suppliers have been hesitant to accept virtual card payments. Suppliers worry about potential fees, settlement times, and other complexities associated with card transactions.
Combining virtual cards with Accounts Payable (AP) resolves the need for supplier acceptance and enablement while successfully addressing the needs of both buyers and suppliers. With a hybrid of virtual cards with AP, buyers can use virtual cards to manage cash flow and defer payments while suppliers receive money directly in their bank accounts without additional setup or card acceptance requirements.
As businesses strive to phase out paper-based AP and outdated, labor-intensive payment methods, this solution provides a jump toward digitization in B2B payments. Since it automates direct transfers, combining virtual cards with AP also streamlines reconciliation and reduces payment disputes, making life easier for accounting teams on both sides of the transaction.
With a move to digitized B2B payments, businesses can begin to catch up with consumer payments where the streamlined experience is standard rather than the slow, fragmented paper-based approach still used by more than half of all businesses.
For example, eliminating checks improves efficiency, reduces fraud risk, and streamlines payments as part of the digital accounting system, delivering a reduction in costs and improved transparency into the company’s financial health.
Digital transformation in B2B payments is the means to drive successful financial outcomes.
Bottom Line:
By meeting buyer and supplier needs in B2B payments, the hybrid virtual card and AP approach opens opportunities for businesses to integrate more of their AP into the virtual payment system, thus enhancing their working capital while enabling a streamlined payment cycle.
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