How to maximize savings with virtual cards for treasury departments

Treasurers operating in today’s business landscape are facing more pressure than ever to cut costs, streamline treasury operations, and strengthen payment security.

A solution that can move the needle on all of these factors is the Virtual Card. A corporate Virtual Card is a 16-digit number randomly generated for specific transactions or vendors, providing a secure and flexible digital payment method.

Virtual Cards don’t just replace traditional payment methods, such as ACH, wire transfers, or physical cards; they enable treasury teams to tap into new cost-saving and revenue-generating opportunities, reduce tedious manual processes, and gain greater control over every payment.

This article offers an in-depth look at the immense potential of Virtual Cards for treasury.

Consumer vs. corporate Virtual Cards: Key differences treasurers need to know

By now, nearly everyone has experienced paying with a Virtual Card—perhaps for an online subscription or a one-off purchase. While consumer Virtual Cards are built using similar technology and offer some of the same benefits as corporate Virtual Cards, there are key differences. First and foremost, corporate Virtual Cards are purpose-built for business-to-business use.

Here are the main differences between consumer and corporate Virtual Card benefits.Corporate virtual cards:

The SAP Taulia difference:

• Accelerated payments allow suppliers to be paid sooner without requiring buyers to update payment terms within their ERP manually
• Integrate directly to ERP and accounting systems to make managing payments and reconciliation easier.
• Offer advanced controls for card administration, including for reissuance, card expiry adjustments, and card cancellations

Corporate Virtual Card benefits for treasurers

Virtual Cards are more than just a payment method; they can serve as a real strategic advantage. In fact, 94% of organizations say that Virtual Cards improved their transaction speed, detail, and security.

The top corporate virtual card benefits are:

• Accurate reconciliation and reporting: Every transaction is captured with rich data, including the invoice number, cost center, etc., ensuring the reconciliation process provides clear, real-time visibility into spending.
• Stronger spending controls and budget enforcement: Each Virtual Card can be locked to a specific amount, supplier, and time period, preventing unauthorized spending and reducing the need for exceptions or audits.
• Lower fraud exposure and minimized risk: Single-use or restricted card numbers make compromised data useless, increasing payment security for businesses and reducing fraud risk compared to physical cards.
• Efficient procure-to-pay operations: Virtual Cards allow you to automate tedious manual tasks. They can also eliminate the need for purchase orders for smaller buys, simplifying AP workflows.
• Improved payment timing and working capital flexibility: Virtual Cards enable reliable supplier payments and unlock opportunities to extend payment terms (DPO) while still ensuring suppliers are paid on time.

Three ways Virtual Cards create cost savings

It’s a common misconception that Virtual Cards are more expensive than other payment methods due to perceived high fees. However, when considering operational savings, fraud reduction, and liquidity benefits, Virtual Cards can be one of the most efficient payment tools available to treasury departments.

Here are three specific ways Virtual Cards generate direct cost savings:

Virtual Card programs offer financial rebates based on the volume of purchases. This has the potential to transform the accounts payable department from a cost center into a revenue generator, with savings flowing directly to the bottom line. For example, with SAP Taulia ERP-embedded virtual cards, you can unlock as much as $2M in savings for every $200M of payables.

Globally, financial fraud costs businesses about 8% of their revenue every year. Security features built into Virtual Cards help mitigate potential fraud expenses. This saves businesses not only the direct financial loss but also the costs of investigation, recovery, and reputation damage in the market.

Virtual Cards offer process efficiency gains. Manual payment processing and data entry carry a hidden cost, as they drain employee time spent on approvals, exception handling, and reconciling invoices. Automating processes with Virtual Cards gives treasury teams valuable time back to focus on higher-value initiatives in the business.

Key challenges of virtual cards for treasurers

With any process or policy change, adoption can be a challenge. Despite this, Virtual Cards are a sound, strategic option for treasury payment optimization. Each challenge can be addressed with careful planning and clear communication.

Managing supplier acceptance

Not all suppliers will accept Virtual Cards. Just as not all suppliers accept other forms of payment. While this may seem like a challenge, the solution is simple.

Businesses should adopt a multi-rail payment strategy, utilizing Virtual Cards when possible and prudent to do so. Other payment alternatives, such as ACH, can be used as an option when Virtual Card payments are unavailable. Flexibility with your payment types can help you work with suppliers and stay in good standing.

Streamlining internal change management

Whenever you introduce a new process, it is essential to train staff on the new protocols and procedures thoroughly. Making an effort to communicate the benefits of Virtual Cards up front can help get staff on board with the change. Additionally, modern financial platforms, such as SAP Taulia, are specifically designed for easy integration and user-friendly workflows to help you achieve value more quickly.

Configuring integrations

Treasury teams often worry that integrating a Virtual Card program with their existing ERP or accounting systems will be difficult. In practice, Virtual Cards don’t have lengthy or complex implementation timelines. They are designed to integrate directly with leading ERPs, like Oracle and SAP, allowing key payment data, invoice details, and reconciliation information to flow automatically. Most companies will experience a net positive impact on timelines due to the simplicity of implementation and productivity gains by implementing Virtual Cards.

Identifying the right time to introduce Virtual Cards

If you’re interested in Virtual Cards for your business, but are unsure if it’s the right time, use this series of questions to evaluate your readiness:

• Is your business struggling to manage a high volume of low-value invoices?
• Is minimizing payment fraud a significant concern and priority for your organization?
• Does your team need to streamline treasury operations because they spend too much time on manual payment processing and reconciliation?
• Are you seeking new, innovative ways to generate revenue or savings from your accounts payable process?

If you answered yes to any of the above questions, Virtual Cards have the potential to positively impact your treasury operations.

Access untapped revenue and cost savings with Virtual Cards

Virtual Cards offer a multitude of benefits on their own, but their true power is unlocked when they’re deeply embedded into your broader working capital operations. SAP Taulia doesn’t just provide a Virtual Card solution—we integrate with your Oracle and SAP ERP to streamline how you manage cash, supplier payments, and liquidity.

SAP Taulia’s Virtual Card solution is part of a full-featured Payables platform. With no IT support required, you can optimize supplier payments, reduce risk, and gain both flexibility and control with our end-to-end system.

Ready to unlock savings and streamline treasury operations? Download our comprehensive data sheet to learn more about the power of SAP Taulia’s Virtual Card solution. Or, download our Whitepaper: Unlock your working capital potential with SAP Taulia Payables.