Today, accounts payable automation is an issue on the minds of both buyers and suppliers looking for ways to make the payment process less expensive, more efficient and more secure. According to PRNewswire, virtual card payments are growing in importance in the $1.9 trillion commercial cards industry and make up 50% of all B2B payments.
Used for a widening variety of payment purposes, virtual cards are growing in popularity to meet the expectation that buyers pay suppliers electronically. According to a Kaiser Associates survey, this virtual method also benefits suppliers who have seen an increase in B2B sales because they accept virtual credit cards. Obviously, the market is shifting toward accepting virtual cards as the preferred form of payment but how does that impact businesses?
AR Payment Struggles Identified
Today, 95% of the payment remittance for an electronic payment is sent from the customer to the vendor via email. Banks never see this remittance data. Thus, traditional lockbox services can only go so far in enabling invoices to be cleared and cash to be applied. As a result, most AR departments are left with the tedious task of hand keying data from these remittance emails into an AR system to clear the invoices, before the cash can be applied.
First-of-its-Kind Virtual Card Automation
In the face of this challenge, payment industry leaders, Infintech and Comdata, have come together to offer a new tool that streamlines this process and makes merchants more profitable by saving them valuable time which results in saving money. Comdata’s Virtual Card Lockbox, a cloud-based receivables product helps automate the typical processes for accepting and processing virtual credit card payments.
In a few simple steps, the new automated process alleviates the burden of manually keying in thousands of credit card numbers. Here’s how it works:
- Emailed credit cards are re-routed to Virtual Card Lockbox.
- Stored credit card information is secure in a PCI environment.
- Processed transactions get deposited to a merchant’s bank account next day.
- Delivery of a consolidated remittance file gets sent to a merchant’s ERP each day.
AR Department Can Shift Focus Toward Growth
Freed from manual processes, employees from AR departments can now focus on more strategic credit and collection activities. The typical cash delays caused by backlogs or month-end rushes would no longer be a concern as Virtual Card LockBox liberates accounting departments and accelerates cash flow by automating emailed payments. And Comdata has made it easy to implement this new service quickly and simply.
When using Virtual Card Lockbox, businesses will cut the need for manual card entry, simplify the reconciliation process, and improve card and customer security in a secure PCI-compliant environment.
Learn More About Virtual Card Lockbox:
Contact us online or call 1-800-931-6463.