Policy considerations and best practices for payment method selection.

Virtual cards.

Policy considerations:

Every employee can be set up in Airbase and can then request spend to make a purchase using a virtual card. All transactions are pre-approved and duplicate spend is automatically flagged. Virtual card spend controls help to prevent waste (e.g., recurring payments for services no longer needed). These cards provide an efficient automated experience for the accounting team, since transactions automatically sync to the GL, and earn cash back paid directly to the company. For all of these reasons, virtual cards make up 90% of the transaction volume for the average Airbase customer.

Airbase capabilities:

Physical cards.

Policy considerations:

Provide guidance on who qualifies for a physical card. Identify when and where physical card use is appropriate; even if an employee has a physical Airbase card, a virtual card may be more beneficial. Physical cards do not have pre-approval workflows and their transactions do not flow automatically to the GL, though they do have a receipt compliance feature. Your policies should address guidance for control parameters (e.g., spend limits) and if, and at what point, cards will be locked for noncompliance.

Airbase capabilities:

Purchase orders.

Policy considerations:

Companies use POs to provide a clear audit trail of contract terms, payment dates and details, approvals, and vendor deliverables. With a spend management system, a PO is not always required for internal purposes since Airbase allows for contracts to be attached to transactions and generates an audit trail of requests, approvals, and transactions. There are times that a vendor requires a PO and/or situations where AP teams prefer PO workflows, and it is simple to create one within Airbase. POs give companies the opportunity to summarize terms and conditions between themselves and the vendor and can serve as a contract in the absence of one. Policies should address when your company expects to create a PO for a transaction.

Airbase capabilities:

Bill payments.

Policy considerations:

After receiving an invoice, accounts payable will select a payment method — this will be influenced by the vendor’s requirements and what is best for the company. Most AP teams try to avoid writing checks, only use expensive wires when absolutely necessary, rely on ACH payments as an efficient payment method, and use vendor credits whenever they can. In addition to these traditional payment options, Airbase gives accounts payable a new and efficient payment method with virtual cards. This method is often the preferred one since it generates cash back and automatically posts transactions to the GL. Vendors that accept card payments accept virtual cards.

Airbase capabilities:

Out-of-pocket expenses.

Policy considerations:

Decide and specify the extent to which you are comfortable with your employees using their own funds to make purchases. Note that when employees’ funds are used, approvals are after-the-fact, limiting control and real-time visibility into spend. Most companies do not wish to give every employee a corporate card, so employees are accustomed to using their own funds and then seeking reimbursement. However, because every employee can be given access to virtual cards with built-in pre-approval compliance, there are fewer cases where employees need to use personal funds to make purchases. If your policy is to avoid personal card use as much as possible, then a best practice would make Airbase physical cards available to employees that need to make regular in-person purchases.

Airbase capabilities:

Summary comparison of different payment methods.