How Hotels Can Use Virtual Cards For Accounts Payable
by Jacob Statler
Another late night “click” = another hotel reservation on the books.
That future guest’s job is over — they’ve researched, read reviews, choose your hotel, and finalized their reservation.
They’ve got no clue what it takes to stay on top in the hospitality industry, do they?
They don’t know how you keep your hotel operating with excellence so that those 5-star reviews are out there in digi-land, speaking for how hard you work.
Those guests aren’t privy to that rushed online order to replace a lobby sofa ruined by a guests’ red wine spill or the hours spent on the phone jumping through hoops to secure employee corporate cards. Not to mention having to repeat the same process all over again when an employee leaves and a new team member joins.
Your guests will never know about all the behind-the-scenes work required, and frankly, they probably don’t care either.
But YOU know.
What if there was a simpler way to manage hotel expenses, track employee spending, and streamline accounting sync and reconciliation?
Virtual cards for hotels are the answer.
Think vCards are just for your guests’ use? Think again. Let’s talk about how your hotel can take advantage of virtual cards.
- What are virtual cards?
- How can hotels take advantage of virtual cards?
- Benefits of hotels using virtual card
- The Plate IQ card for hotel payments
- Virtual cards for hotels is a smart trend to follow
What are virtual cards?
Virtual cards (vCards) are temporary credit card numbers that allow you to make online payments anywhere credit cards are accepted. These randomly-generated numbers are disposable and function as placeholders for your real account numbers.
Using a vCard keeps your account details hidden and secure.
Virtual cards can be issued as single-use or multiple-use numbers, making them a valuable payment option to replace employee corporate cards, pay your hotel vendors, and track spending through specific GL-coded cards.
They’re gaining traction in both B2C and B2B transactions. Chances are, your hotel has received plenty of virtual card payments for guest services. So why wouldn’t you incorporate them on the AP side of your hotel operation as well?
71% of those will be B2B transactions, and your hotel should be part of that.
The research found that businesses will value the simplicity of virtual cards compared to more expensive, slower methods (like check payments) still being used in the US.
Implementing virtual cards for hotel payments is a wise, forward-thinking move that comes with a bouquet of benefits and a plethora of ways to utilize them.
How can hotels take advantage of virtual cards?
vCards can be used for most of your hotel AP payments. Let’s talk specifically about how your hotel can start taking advantage of virtual cards immediately.
- Online purchases — Most front-desk hotel staff just order what they need online (TVs from Amazon or furniture from Ikea), so the usual net-30 process doesn’t work. They need a corporate card, which can take a long time to apply for and receive. Creating virtual cards for specific purchases solves the problem of making online purchases without needing to use a corporate card or requesting employee reimbursement.
- Pay vendors online — You can swap slow check processing and mailing checks for electronic vendor payments with a virtual card. Promptly paid vendors are happy vendors.
- Employee expenses — Traditionally, it’s a hassle to get expense reports from employees because they’re filled out manually and often receipts go missing. When an employee uses a pre-approved vCard, the controller is alerted and the employee is reminded to upload supporting documents. Issuing a virtual card for approved employee spending is a winning move for your hotel accounting process as well as your staff members. Employees don’t need to dip into their personal funds or wait for reimbursement — they’ll appreciate YOU for thinking of THEM.
- Executive expenses — A virtual card can easily replace corporate cards for executive expenses. For example, executives can use a vCard to book travel online without going through the hassle of requesting multiple corporate cards from your banking institution.
- Earn cash back — While implementing vCards to handle much of your hotel operation expenses, you can bank cash back to boost your bottom line.
8 Benefits for hotels using virtual cards
We’ve hit the areas you can put virtual cards to work for your hotel. vCards are a versatile, innovative payment option that enhances AP automation and comes with significant benefits for your hotel.
1. Reduce Fraud
Fraud is on the rise, and using virtual cards adds an extra layer of security for your hotel’s financial info. Ditching corporate cards in favor of a vCard where possible (employee expenses, online purchases, and vendor payments) keeps your account details secure and confidential because fewer people have access to your actual account numbers. For example, creating a single-use card for a specific purchase or a recurring-use card coded to a specific merchant prevents hackers from exploiting leaked card info.
Paying vendors electronically with vCard payments reduces the fraud risk associated with mailing paper checks that can be intercepted.
2. Streamlined GL coding
GL coding is better and easier with vCards. Issuing a GL-coded vCard for specific purchases ensures those expenses are accurately recorded to the proper category every time. Once the controller has set the coding, its seamless — saving you more and more time AND human error.
3. Real-time expense control
Virtual cards, like the Plate IQ Card, allow for set vendor limits, and you can see activity in real-time. When you pay hotel vendors with a virtual card, it posts immediately, increasing the accuracy of the overall view of your hotel finances.
If you have a multiple property hotel group, using vCards allows you to track real-time spending in categories across properties with fully GL-coded transactions.
4. Pad your bottom line
This is a no-brainer. Virtual cards let you earn cash back rebates while paying your expenses which pads your bottom line. The more you use vCards for your hotel payments, the more cash back you rack up.
Clutch Coffee earned over $5,000 in cash back rebates in only 6 months using the Plate IQ card.
5. More efficient invoice payments
In the hotel business, efficiency is essential. Using virtual cards to pay hotel invoices means no more late payments due to snail mail or waiting for the next batch of paper checks to be processed.
Your end-of-month financials are more accurate when your hotel invoices get paid promptly.
6. Improves hotel vendor relationships
This is an obvious but vital point. Faster vendor payments equal happy vendors.
Vendors who get paid on time or, better yet — early — are more likely to work with you if you have a special request.
Plus a bonus is you can ask for early payment discounts.
7. Keep your hotel running smoothly
Your hotel has got to run like a well-oiled machine. If it doesn’t, your guests will be cranky and dissatisfied, and unfortunately, that kind of word-of-mouth moves fast. On-time payments with virtual cards mean your hotel vendor delivers your supplies on time.
Guest satisfaction depends on your hotel operation running as advertised — unavailable items or services will weigh heavily on your guest satisfaction score.
8. Brings your hotel up-to-date with innovative technology
Look at it like this: Your guests are already using vCards to pay for their rooms online. Why wouldn’t YOU use them to pay your expenses? You know the hotel industry is fast-paced and ever-changing.
So if you don’t adapt, you’ll be bypassed by a hotel willing to make necessary changes.
Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” Adding virtual cards to streamline your hotel AP is a leader move, plain and simple.
Try VendorPay for hotel payments
Plate IQ VendorPay is an excellent solution for hotels looking to use virtual cards in their AP process. VendorPay’s virtual debit card comes with a boatload of customization available. Issue single or multi-use virtual cards for vendor pay, employee expenses, and executive spending to make changes with the click of a button.
VendorPay also supports hotels looking to issue virtual cards to employees minus the prohibitive requirements of corporate cards. You can issue cards instantly — no bank approval needed.
Need a physical card for employee expenses? No problem. You can issue a physical card for multi-use or recurring expenses.
Virtual cards for hotels is a smart trend to follow
The long and short of it comes down to streamlining your hotel payments in any way possible.
vCards are an efficient option to make your vendor payments and employee reimbursement a breeze while better tracking and controlling hotel expenses.
Interested in how the Plate IQ card can revolutionize your hotel AP? Request a demo today to find out.
Jacob Statler writes about the unique challenges of hospitality AP automation for Plate IQ.
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