Virtual cards are on the rise. Recently, Hudled sent out a poll asking how companies are paying for their SaaS subscriptions. Overwhelmingly, a third of respondents said they used virtual cards. While they’re growing in popularity, it’s not always clear how to implement them in your company. When used correctly, virtual cards can significantly reduce your SaaS costs. In this guide, we cover everything you need to know about using virtual cards in your business.
Virtual cards are card-free payment solutions that put you in control. They work similarly to traditional debit or credit cards. Only, they're created online. You can select your desired currency, set spending limits and streamline payment processing. When you create a virtualcard, it generates a unique 16-digit card number, expiry date, and CVV.
Individually assign a virtual card to a SaaS tool or expense category. Virtual cards can be limited to a single transaction, a specific date range, a dollar amount, or to certain merchants. This gives companies more control over their expenses, keeping them within budget. If you ever need to stop a SaaS subscription, simply cancel the card.
Haynes D'Souza, Finance Manager at Airwallex advises:
"There is nothing more frustrating than having a subscription that automatically renews - especially if you no longer use it. With virtual business cards, this problem can be easily solved with a press of a button. Virtual cards can be disabled electronically, therefore simply cancel your virtual card to prevent it from being charged."
Set limits on virtual cards. This ensures no SaaS subscriptions will go above a pre-set amount, eliminating hidden or extra costs. To set a limit, ask your employees what the tool is expected to cost each month. In this calculation, ask them to factor in what the SaaS tool could grow to. Then, set the appropriate card limit and let them know this limit. This will ensure you're both on the same page while making it easier for you to track expenses.
Creating virtual cards that have a set expiration date can remove unwanted charges. This isparticularly helpful for one-off purchases or automatic renewals. It'll prevent overcharges on monthly SaaS subscriptions when you don't want to accept new upcoming costs.
Depending on your provider, each SaaS vendor has different pricing models. For example, some products make money through foreign exchange fees and conversions. When you include these in your purchases, it’s easy to see how fees can add up. You can reduce your SaaS costs and avoid accidental fees by checking your virtual card's default currency.
Ask your employees to provide you with a copy of the receipt to verify purchases. As a general rule of thumb, ask for them to upload the receipt within 24 hours.
Limit the use of personal funds for company purchases. When employees use personal funds, they forgo an approval process. This adds extra company expenses, limiting real-time visibility and spending control.
Here's a tip from Aayush Patel, Opeations Lead at Floodmapp:
"Integrate virtual cards right into your employee’s digital wallet (eg Google or Apply pay) on their phone, to enable them to make payments on the go & reduce time spent on expense reimbursements."
Before your next purchase, consider adopting these practices to make the most out of your virtual cards. Simple actions such as dedicating one card per SaaS subscription, or avoiding purchases via personal cards can help reduce your SaaS costs significantly. If you need more help getting visibility across your SaaS, consider signing up to Hudled. Our SaaS intelligence platform automatically finds savings to apply in your stack and give you instant visibility into every tool, so you know exactly how much you’re overpaying for software at any given moment. Sign up for free today on a 14-day trial.