Managing IT budget with virtual cards
IT teams, whether internal or working in managed IT service companies, who handle software subscriptions on behalf of clients often deal with expensive software expenses - yearly hosting payments, ongoing SaaS subscriptions, and sometimes one-time payments. Expenses range from high to low, and are paid with a variety of methods, including out-of-pocket expenses, invoices from suppliers, and credit card payments. A fragmented IT budget and expense management results in the IT team not being able to access funding on time, causing disruptions to normal operations. Furthermore, the finance department is under strain due to manual work associated with invoicing, bank contracts when issuing cards, approving expense reimbursement forms, chasing invoices, and reconciling. A virtual card can be an effective tool for managing IT budgets since it gives instant access to company funds, speeds up business operations, gives better control over spending, prevents unnecessary costs, and offers options for cost reduction. We will explore both the financial benefits and the operational benefits of virtual cards in this article.
Streamlined IT operations
With virtual cards, IT teams no longer need to go through lengthy processes in order to start a project or pay for software. The traditional way of paying for the invoice was either out of their own pocket, raising an expense reimbursement form along with the invoice, or getting an invoice from a supplier and getting approved and paid out by the company's financial department.
Old ways of managing IT budgets can delay the implementation of specific projects when specific software is needed. The virtual cards, tailored to the business or project, give them access to pre-approved budgets and streamline their operations.
As some software vendors only accept card payments, it also gives IT teams greater flexibility when purchasing software.
Virtual cards offer unparalleled flexibility when it comes to management. Using a remote dashboard, finance teams can issue and manage cards without engaging in lengthy conversations with banks. The cards can be issued on the spot, and recurring top-ups ensure that funds are always available so that the team does not lose access to the software if a payment is missed - all plans are automatically renewed without interruption.
Better spending control
A virtual card's unique flexibility enables IT teams or even specific projects to have their own cards with assigned budgets. A card can also be tailored to specific project needs, such as recurring top-ups, or specific limits and merchant restrictions. This way, transactions over the limit or from unknown merchants can be blocked, giving the finance team peace of mind that the company funds are spent appropriately.
Virtual cards also eliminate the need for out-of-pocket expenses and expense reimbursement forms. By requesting supporting documentation along with every card transaction, finance managers can reduce the amount of time they spend chasing invoices and reconciling accounts.
Furthermore, the management dashboard provides an overview of all expenses across all projects and budgets. By doing so, it's easier to identify overspending areas and act in a proactive manner. In order to prevent overspending, IT teams can use single-use cards for trials of new software. Due to the expiration of the card after first use, the trial will not automatically renew, preventing unnecessary subscriptions.
Freeing up the IT budget
With virtual cards, you can drastically reduce the costs of SaaS subscriptions and big purchases like hosting, improving your bottom line as a result.
Virtual cards frequently come with zero transaction fees, meaning that they are completely free to use. In addition, you may be eligible for a cash rebate - which means you receive money back each time you spend. For bigger purchases like AWS, Shopify, Cloudfare and similar, that are usually done once a year, it may be smarter to use virtual cards rather than the traditional transfer route in order to eliminate transaction costs and, secondly, lower your costs.
Furthermore, paying with a card is much faster - payments are settled almost immediately, and the sooner a payment is settled, the better your relationship with vendors will be. This can lead to better payment terms or payment discounts over time, which is great for working capital. Last but not least, virtual cards can be issued in multiple currencies, so you can make online purchases in USD, GBP and EUR, for example. Paying in the merchant's currency further saves money on transfer and FX fees.
How Fyorin’s cards can help you free up the IT budget and gain better control over spending
Fyorin provides IT teams with flexible virtual cards connected to multi-currency accounts provided through our network of global financial institutions. You can issue unlimited virtual cards and tailor them to your IT budget needs.
Interested in requesting your IT virtual card? Get in touch with us at [email protected]
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