When I started Airbase in 2016, virtual or digital corporate cards had existed for more than a decade, but adoption wasn’t great. The financial institutions that issue virtual cards had only just begun to give access to fintech companies seeking to integrate cards into software workflows. This deep integration of cards into software workflows has given virtual cards a new life.

The power of these software-enabled virtual cards is their ability to pull data into automatic workflows for card spending. Consequently, virtual cards —

• Have built-in approval workflows.
• Sync purchase data directly to the general ledger.
• Allow for receipt attachment to the transaction record.

While all of this is an improvement for companies when managing corporate card spending, my goal was to accomplish something bigger. I wanted to integrate Airbase virtual cards into a comprehensive bill payment and expense reimbursement system seamlessly — to make a great innovation a transformational one. We refer to this full solution as spend management. It automates workflows for all non-payroll spend but is flexible enough to be used for just the individual products — corporate cards, bill payments, or expense reimbursements — if preferred.

Long the bane of the back office, corporate cards have historically meant a lot of manual work, with little visibility and control. All of this is made messier when several department members pile charges onto one shared card. The time spent chasing documentation and reconciling statements is inefficient for finance teams with more important work to do. As one of our customers, JD Higginbotham of Ridecell, recalled, “We’d download all of those transactions into the GL each month, and then our accounting manager would spend close to a full day going through them to make sure they were assigned to the proper accounts and departments. Now that we’ve moved onto Airbase cards, that process is no longer required.”

Instead of this chaos and confusion, consider the flows associated with a workflow-enabled virtual card:

• An employee submits a request to make a purchase.
• That request is automatically routed to the appropriate approver(s) mapped to the company’s expense policies.
• Notifications of the request appear in the approver’s Slack and/or email.
• Once approved, the virtual card is created with preset limits and controls, and the employee gets access to the card.
• The employee passes the card details to the vendor (number, CSV, and expiration date).
• Once the payment clears, the transaction details can be automatically synced to the GL.

Of course, these are the basic flows, and there is nothing basic about how companies spend money. Virtual card programs are differentiated by their various levels of customizations. A few examples:

• Different card types. If it makes sense, you can have a card for recurring spend and one for specialist spending, like per diem. 
• Different approval flows. Some purchase types might need specialized routing, IT approval of software purchases, for example.
• Formation of approval groups. By setting up a group, spending isn’t dependent on approval by specific individuals.
• Receipt reminders. By having automated reminders, fewer transactions come in without receipts, sparing the accounting team the inconvenience of having to chase them down.
• Auto-categorization. Card spend is automatically categorized based on past transactions.
• Automatic employee provisioning. When the cards are integrated into a company’s HR information system, employees are automatically provisioned, and de-provisioned, so only current employees have access for spending purposes, 

Virtual cards are also a much more secure way of making payments so that the accounting team isn’t burdened with having to close compromised cards and update vendors with new card details. Our customers consistently report saving significant amounts of time by using virtual cards. For example, Michael Zheng from Affinity told us, “If we didn’t have Airbase cards we’d probably spend three to five hours a week manually reconciling these transactions on the different cards. I can set coding rules when I’m approving an expense to automatically reconcile it with the GL. It’s a system that allows one person to address the manual work of three.”

Many of these same approval workflows and controls are also important for non-card spending, including paying invoices with checks, ACH, or vendor credits, and reimbursing employees who have made purchases with personal funds. This is why I’ve always maintained that virtual cards are best for companies when integrated into a single consistent platform with all other spending. There are plenty of meaningful benefits of this consolidated approach:

• Real-time reporting of all non-payroll spend.
• Consistent approval workflows across all company spend.
• One easy system for making all payments, whether those are by check, ACH, vendor credit, corporate card, or foreign currency wire.
• An easy shift from an inefficient payment type (checks or ACH) to an efficient one (corporate cards) to earn the cash back.

One of our customers, Heap, voiced appreciation of the single system best. “[We have an] all-in-one platform for everything spend related. We use virtual cards, physical cards, expense reimbursements, POs, and bill payments. Each area works perfectly and syncs directly to our ERP, NetSuite. It has saved us so much time. Our employees love the virtual card functionality and ease of approvals.”

The adoption of virtual cards has been rapid and is only expected to accelerate. Eventually, virtual cards will become the dominant corporate card payment method, especially as the big legacy corporate card providers begin to seek ways to add this technology to their programs. Airbase has recently partnered withAMEX and Silicon Valley Bank to integrate their cards into the Airbase virtual card system. Still, there will be times that a physical card is preferred, and possibly required, for the foreseeable future, so programs that offer both are ideal.

Essentially, virtual cards are a software product. This means that choosing the right program for your company is more than finding the fastest card issuer with the lowest fees and a high cash back promotion. It’s a matter of getting the most robust comprehensive software solution — preferably one with no fees and the highest lifetime cash back.