Virtual Accounts for Easier Collections and Reconciliation

Virtual Accounts are those accounts that are created for a specific purpose. Often businesses will create virtual accounts linked to specific customers or customers' accounts. These can be started and managed with ease. The payments customers make will be to the virtual account that has been created for them, and then once the payment is made, it is moved to the main account of the business.

With the creation of virtual accounts, you will find it easier to manage payments that you receive from your customers. Since the customer ID will be different for different customers within your main account, you will know when a customer has delayed their payment and enable you to intensify your collection efforts. On the positive side, customers who pay on time for their purchases can enjoy discounts and better payment terms.

Virtual banking forms the basis of virtual accounts that you can create for different customers. It ensures that customers and your business can have access to different aspects of banking without having to physically visit the bank every time. The tagging of a virtual account ID to each customer or vendor is only possible if you have access to robust virtual banking services.

Virtual bank accounts ensure that you can have access to most of the banking functions in a secure manner at your fingertips. Virtual bank accounts are also equipped with the checks and measures to ensure that the wrong person or entity is not able to access the account. Virtual bank accounts when used optimally, can speed up your collections and payables cycle.

Virtual accounting management allows you to segregate different banking activities under one centralized bank account to allow for easier and clearer financial operations. This, in turn, means that there is better visibility and reporting as well as quicker reconciliation.

Yes, it does. With virtual accounts being tagged to each customer account, the tracking of payments received and the reconciliation process that follows becomes much easier. The finance team spends less time on tracing which payments belong to which customer accounts and is able to support the sales team in deciding if the customer is eligible for credit sales with just a few clicks.

Virtual Accounts are essential for a startup because it helps them with the following aspects:

With the virtual accounts module, it becomes easier to track which customers are habitual late payers and the ones that often mislead you about the payment status. It also ensures that customers who are habitual defaulters do not continue to avail goods or services on credit terms. It removes the personal bias factor when it comes to deciding on credit terms for customers.