Virtual accounts are an innovative way of managing and monitoring incoming payments from customers or subsidiaries. The application processes this by giving each customer a unique account number or identifier to sort and assign the transaction amount from different physical bank accounts. The monitoring feature of a virtual account allows users to clearly identify the customers who have paid which is a great benefit while running a business.
For both domestic and international markets virtual accounts offer a range of benefits.
1. Save cost with limitless virtual accounts
There are only a limited number of actual bank accounts that a company can have. Therefore, using virtual accounts reduces cost, dish, and administration. Unique virtual accounts for each customer help create individual IDs with a way to share details. Companies can also create virtual UPI IDs with these accounts.
2. Smoother flow of transactions
When using virtual accounts transactions are possible from all banks allowing a smooth flow of cash and ensuring that the business is not hampered in any way. As said before, the easy shareability of the account details makes these types of accounts easier to use as well as keep them comparably secure enough like the traditional bank accounts.
3. Easier Management
Virtual accounts can be managed very easily. These can be activated easily and even be deactivated any time the company wants. This helps users to get better control of the funds distribution. Transfers getting initiated for these disabled accounts automatically get rejected.
4. Faster transactions
Virtual accounts are also faster at transaction than physical bank accounts. Users can get the funds transferred into their accounts in less than 3 hours. Also with the virtual accounts, users get to choose different numbers and linked email id for the different accounts. This is especially important for businesses serving a lot of clients. The company can create these accounts for all the different customers and they can get personalized treatment for their transactions. Also, the system set up for managing the transaction can automatically send custom notifications to all these clients when necessary.
5. Add multiple details
In case of bills and fee payments by customers, businesses can provide these virtual accounts to each student or other customers for completing the transactions. As mentioned above, the contact detail for each of the participants can be scheduled with the different accounts. This helps the company manage all the different payments made by its customers and even solve the transaction errors to its account one customer at a time. This makes the company much more appreciated by its customers and increases its reliability.
6. Better automation features
Again, the virtual accounts setups are a lot faster than traditional bank-based accounts. This means that customers are easily able to complete payments like loan repayments. In a traditional banking system, this would take a lot of time as the company has to manually manage all the bank statements. Virtual accounts come with many automation benefits which speed up the processing system and automatically send notification both to the clients and the companies after a successful transaction is carried out.
All the transactions taking place using virtual accounts are reconciled instantly or within a few hours. In a business with many clients, this again is highly beneficial for the company as it frees up the working capital of the organization which can then be reinvested for greater profitability.
Though virtual accounts are linked to a physical bank account, companies have the ability to specify individual sources linked to the same account. This helps to reconcile all the incoming transactions and use automation to give the best service to the customers.
By providing better service to the customers, a company gets a lot more reputation and increases its reliability significantly. Also, with smoother and easy-to-manage transaction processes the employees can focus more on the functionality of the organization and increase the overall productivity of the system.