Procurement Management: A Guide to the Basics of the Procurement Cycle

In modern business, cash and checks have gone the way of the horse and buggy: they’re simply too inefficient. But even their replacements – traditional payment methods like debit and credit cards – are overdue for an upgrade.

Welcome virtual corporate cards.

These digital payment methods offer numerous perks, from faster payments and reconciliation to greater control and security. They’re quicker, safer, and easier to integrate and use for accounting and operational teams alike.

Plus, the industry is on the cusp of an explosion, which could send innovation through the stratosphere. Between 2021 and 2026 alone, virtual card spending is predicted to skyrocket from $1.9 trillion to $6.8 trillion.

Here’s what to know.

Key Takeaways

• Virtual corporate credit cards pave the way for the future while addressing a multitude of modern business pain points.
• They hand companies greater control over their spending, simplify accounting across the board, and even help protect employees.
• Plus, with so many nuances and use cases, it’s incredibly easy to personalize virtual cards to meet your unique needs

First, A Brief Refresher on Corporate Cards

Corporate credit cards are credit cards issued to a business entity – not a person – as the responsible party.

In most other respects, corporate cards are like regular credit cards. They require a credit check to apply, charge a regular interest rate, and even come with reward systems. Corporate purchase cards are also unique in that the business can issue dozens of employee cards on the same account.

Pluto corporate cards come with specific controls to help your business manage spend. Real time tracking, setting limits on the go and quick reconciliations are just a few of the things that Pluto can provide.

But there is more. For companies who need to act quickly and require flexibility in their card issuing, there are virtual cards.

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What is a Virtual Corporate Card?

Virtual corporate cards, like regular corporate cards, are linked to the business’ budget. Employees can use these cards to pay for business expenses without using their own personal cards or cash.

But unlike physical cards, virtual credit cards reside solely in the digital realm. These cards are essentially unique, digitally-generated 16-digit card numbers that tie to a specific spending account. (In this case, the business’ account.) Each virtual card contains other essential card details, too, like the following:

• Cardholder’s name
• Company’s billing address
• Card number
• Expiration date
• CVV

Virtual cards are also unusual in that they can be generated and destroyed in moments. They can be designed to permit one-off charges, expire same-day, or hold only a specific dollar amount. Some virtual cards can even be linked to a particular vendor for one-time or recurring payments, perhaps with weekly or monthly spend limits.

Virtual cards can be accepted anywhere that online payments, and even some in-store payments, are accepted. Due to their ability to generate new numbers on demand, they offer additional security and control for business accounts. Plus, they can’t be lost or stolen like a regular credit card.

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Virtual Credit Card vs. Virtual Corporate Card

A virtual corporate card is simply a digital credit card issued to a corporation. For the most part, you can use virtual cards the same way you could use regular cards. However, like corporate cards, these virtual equivalents allow the issuing firm and receiving businesses to set particular spend and monitoring controls.  

Because virtual credit cards are 100% digital and able to generate new 16-digit numbers on demand, they’re optimized for safety and flexibility. They also make it easier to reconcile books and otherwise manage spending.

What are virtual cards used for?

Virtual cards have gained significant traction due to their adaptability and security features. They are commonly used for:

1. Online Purchases

Virtual cards serve as a secure and convenient payment method for ecommerce transactions. They allow businesses to conduct online transactions without exposing sensitive primary card or bank details. This enhances security and reduces the risk of fraud, making virtual cards a preferred choice for digital transactions.

2. Subscription Management

Businesses utilize virtual cards to manage subscriptions to various software or online services. Virtual cards offer the flexibility to set spending limits and deactivate cards easily, providing control over recurring expenses. If a service is no longer required, businesses can deactivate the virtual card associated with it, preventing further charges.

3. Travel Expenses

Virtual cards are issued to employees for specific travel-related expenses, offering precise control over spending and simplifying expense reconciliation. By providing virtual cards for travel expenses such as accommodation, transportation, and meals, businesses streamline the reimbursement process and ensure compliance with travel policies.

4. Vendor Payments

Virtual cards are used to make payments to vendors and suppliers, offering a secure and efficient payment solution. Businesses can generate virtual cards with set limits for individual vendors, enabling better management of payments and tracking of expenses. Virtual cards also reduce the risk of fraud associated with traditional payment methods.

5. Single-Use Scenarios

For transactions requiring heightened security, businesses utilize single-use virtual cards. These cards are generated for one-time use and become invalid after the transaction is completed, minimizing the risk of unauthorized or fraudulent use. Single-use virtual cards are ideal for online purchases from unfamiliar vendors or for specific transactions where security is paramount.

6. Employee Expenditures

Instead of issuing physical corporate cards, businesses provide employees with virtual cards for business-related purchases. Virtual cards can be customized with predefined spending limits, allowing businesses to control and monitor employee expenses effectively. By using virtual cards, businesses streamline expense management processes and reduce the administrative burden associated with traditional reimbursement methods.

Why Use Pluto Virtual Corporate Cards?

Pluto virtual cards offer tons of perks and use cases. With more control and yet unparalleled flexibility, your business can remain nimble as you grow.

At the same time, department heads can keep an eye on expenses, spending, and accounting practices.

1. Flexible Setup and Spending

Modern companies need to be nimble, able to make purchases on the fly and reconcile their books in minutes, not days. Virtual cards let your business do so –without breaking their budgets.

Virtual cards provide unprecedented levels of flexibility to businesses of all sizes. After signing up, cards can be generated and issued to individuals with just a few clicks.

They also permit companies to limit available vendors, set a specific spending limit, expiration dates, and even the specific department budget the card should link to.

2. Unlimited cards

One of the biggest perks of Pluto's cards is that you can create as many as you need in a matter of seconds.

The times when an employee had to wait several days for the approvals and the card details to arrive are over.

For example - at 9:00, we had a team discussion about additional performance marketing activities.hile we were on the call, the department head created 3 virtual corporate card numbers for us to use.

It took him roughly 2 minutes to create them. All that without missing a beat on the call itself.

Right after we finished the call, we could start setting up ads.

3. Spend Control

Once you’ve generated a card – either for your team or by employee request – you can quickly personalize them for added constraint.

These controls are admittedly extensive, allowing your business to:

• Lock cards to a particular merchant or vendor
• Ensure cards can only pay to specific accounts
• Generate cards with set one-time, monthly, or recurring expenditure limits
• Institute purchase approval practices for individual cards, persons, or teams

Companies can use these various limits to prevent overspending, surprise fees, and unnecessary surcharges. Plus, with specific cards linked to individual employees or vendors, compartmentalized spend management becomes even easier. For many businesses, this is a welcome alternative to issuing high-limit cards to every employee that requires one.

In the example above, you can see one of the popular uses of Pluto virtual cards - employee benefits.

When a new employee joins, how much time does it usually take your HR department to get wellness or children's educational benefits to that employee?

With Pluto, it’ll take you leess than 2 minutes.

4. Higher Accountability

Another perk of virtual cards is that they can be generated for and linked to a single individual or team.

That makes purchase tracking easier, which increases personal and departmental accountability.

By using built-in accountability and analysis tools, your business can better track how and when money is spent at every level.  

5. Streamlined Accounts Payable

Enhance your finance team's efficiency with Pluto, featuring virtual corporate cards and integrated accounts payable software.  Pluto can integrate with your accounting software, making it easy to sync your chart of accounts, automate mapping your GL accounts, and bulk verify & export your expenses so you can close your books 10x faster.

From there, settlements can happen immediately rather than taking days or weeks. This eliminates the slow, potentially error-riddled manual accounting process with a faster, cheaper, and more efficient digital alternative.

6. Better Security

Pluto's virtual cards can help greatly reduce your overall card risk profile. Their increased security is due to their unique design, including their:

• Digital nature, which precludes them from being physically stolen.
• Set spending limits to prevent overcharging.
• Ability to block vendors and retailers from storing personal or card information long-term, helping to prevent fraud
• Ability to include one-time or vendor-specific expenditures and other spending controls, limiting financial hemorrhaging
• Auto-lock features to freeze cards instantly
• Ability to delete and regenerate virtual cards in seconds rather than days

7. Real-Time Reporting

Pluto's virtual cards feed their data directly into a centralized interface, allowing all data to show up in real-time reports, simplifying the analytical process. The spend management systems also offer real-time notifications.

Together, these features offer companies greater real-time visibility over their expenditures. This level of transparency can inculcate a healthier spending culture within a company beyond merely increasing accountability.

Plus, real-time reporting means that accounting teams and department heads can immediately respond to budget requests, verify receipts, and manage card limits.

Pluto expense management dashboard allows you to see everything and makes spend control a breeze.

8. Simple Reconciliation

Virtual credit cards provide an easy approval system to allow finance teams to take advantage of automatic reconciliations whenever possible.

Accounting teams can set codes for recurring transactions and tag controls to identify transactions before posting them to the general ledger. Each card can be linked to a specific employee to link specific transactions to each employee.   

With the right card and accounting integrations, it’s possible to automate the bulk of manual data entry and reconciliation out of the gate. Plus, you’ll increase the accuracy of your data and insights.

9. Efficient Vendor Payment and Management

You can also use virtual cards to simplify vendor management.

You can link specific cards to particular vendors, allowing you to track which teams use them regularly and how their prices change over time.

By setting limits and expiration dates to your specifications, you can prevent teams from “forgetting” about upcoming auto-renewals.

10. Reward Options

Pluto virtual corporate card offers a wide range of perks and benefits!

Instead of giving you Starbucks gift cards, we formed partnerships with some of the most critical services for the day-to-day operations of your business.

11. Reduce the Risk of Fraud

When multiple employees and vendors share a high-limit physical card, you run the risk of operational problems and fraud.

The more people who can access a single 16-digit number, the more likely unauthorized expenses can slip through the cracks.

Virtual credit cards don’t come with the same fraud and data loss risks that physical cards do.

• They’re impervious to hacks that come with swiping physical cards at in-person terminals.
• You can create cards for a particular purchase, vendor or project.
• You can easily link cards to specific employees and/or vendors, offering full control while minimizing risk.

Virtual Corporate Card Use Cases

Due to their innate flexibility and unprecedented control, virtual credit card programs offer multiple potential use cases. There are too many to go over here – but we’ll address a few of the most common or impactful.

Agencies

Digital agencies need to be able to make payments on behalf of their clients. This can be done using virtual cards, which allows the agency to keep track of spending and ensures that funds are used for the intended purpose.

With Pluto, you can create virtual cards for every PPC campaign or bigger project and keep track of your agency's spending in one place.

Not only does this allow you to scale the clients' performance marketing efforts, but the spend control dashboard shows you exactly how much was spent. You can go as far as naming and tagging your virtual cards, so you can see how much was spent per PPC channel on individual clients.

Event Organizers

Catering, lights, music, production, venues, drivers so many things that even organizers have to keep in the air! If you are an event organizer, chances are you understand how important it is to keep your spending in one place. That way when the time comes to file taxes or show ROI, everything is itemized and accounted for.

With a virtual card, all your charges will be automatically filed under the right categories. You can also set limits on how much can be spent per vendor, so you don't have to worry about overspending.

And if you have a team working on the event with you, you can give them each their own virtual Pluto card (or physical) with their own spending limits. That way, you can see at a glance who is spending what and where.

Startups

When you are a startup, your want to fully focus on your product and leave the rest to someone else. With a virtual card, you don't have to worry about setting up a corporate credit line or dealing with complex expense reports.

Just set up your team with Pluto virtual cards and let them manage their own expenses. You can see what they are spending in real-time and track progress against your budget.

Also, when you are at your early phase, there is no time for lengthy approvals. SaaS, ads, tools, plugins - virtual card can service them all.

E-Commerce

You business is digital and so should be your payment tools. With a virtual card, you can make payments online without ever having to worry about the security of your information.

Worried about that Alibaba supplier? Create a virtual card with a limit just for that vendor and you're good to go. Put a spending limit on it, and you limited any potential risks as well.

• Need your team to buy TikTok ads? -> Done. TikTok Ads Virtual Card
• Need to pay an Upwork freelancer? -> Done. Upwork Specific Virtual Card

You see where we are going with this. Create as many virtual cards as you need for as many occasions as you need.

Consulting

Consultants are on the road most of the time, and when they are not - they are seated in the client premises, helping to grow the business.

Employee travel is one of the most commonly-cited reasons for individuals requiring their own corporate cards. Travel expenses may include hotel rooms, a food allowance, or additional budgeting to purchase essential materials while they’re away from home, so to speak.

However, even in your own teams, it’s possible for employees to get carried away. An expensive dinner, unexpected expenses, and hotel room upgrades may all be well within your budget. But if you want to prevent excessive spending on your dime, virtual card controls hand you that power.

Fleet Management

Any company that have a vehicle fleet knows that a lot of time can go into fuel cards management.

Pluto can provide both virtual and physical corporate cards which makes it a perfect solution for efficient fleet management. 

You can issue fuel cards to the drivers as needed, and scale up and down depending on the current business situation.

In addition to that you see the fuel expenses real-time and can set limits and approvals where required. 

You have just received an OTP, and now you are guessing which one of your employees is spending this amount and why. You don’t have time to review it, nor can you delay the payment too much. You neither have control nor visibility. This is the problem of shared corporate cards. 

If you want to make it simpler for your employees, invest in expense management software. It is an automation tool to streamline employee-related expenses—reimbursement, petty cash, and corporate cards. In addition, it offers a centralized platform with real-time visibility into how employees spend company money. As a result, the entire cycle of approval and accounting becomes simpler.

In this post, we share the top six expense management software to help you get started. 

Top 6 Expense Management Software 

Here are six options for expense management software to manage employee-related expenses:

1. Pluto

Pluto is the best platform for managing employee expenses as it streamlines petty cash management, corporate cards, employee reimbursements and account payables. It is trusted by the largest finance and procurement teams in the Middle East, such as Tamara and Petrochem. With Pluto, you can transform reimbursements to get more control and visibility without causing delays or confusion.

Key Features:

• Provides custom no-code approval workflows that adapt to the company's hierarchy for timely and accurate approvals 
• Automates receipt capture through optical character recognition (OCR), with the ability to support bulk upload via WhatsApp
• Supports unlimited corporate cards—virtual and physical, with budget controls to maintain expenses within corporate policies
• Offers zero-balance cards, which get funded once the expense is approved
• Ability to add comments and other transaction details to maintain a comprehensive audit log. View-only access is available for external accountants to review financial data without making changes
• Facilitates card-specific policies to make branch and subsidiary-level reimbursements easy
• Gives the option to make mass payments to reimburse employees
• Offers custom expense reports to overview business expenses and spending trends
• Alerts in case of duplicate receipt uploads to avoid fraud and compliance issues
• Integrates with accounting platforms like Netsuite for advanced general ledger (GL) coding and tax tracking
• Provides secure document storage with a five-year audit log and bank-grade encryption

Pricing:

Request a custom quote

Pros:

• Enables branch and subsidiary-level spend tracking (not offered by other platforms)
• WhatsApp integration to make receipt upload easy
• Offers up to 2% cashback on all non-AED transactions 
• Independent PCI DSS Level 1 Certification

Cons:

• Slightly longer onboarding due to a corporate card offering 
• Integrates with all other major ERPS except Tally

2. Airbase

Airbase simplifies expense reporting with AI and ML and ensures quick, hassle-free, and smart corporate expense management. It is an automation solution for small to midsize businesses (SMBs) and large enterprises with 100-5,000 employees.

Key Features:

• Offers OCR to populate details, including GL category, date, amount, and purpose
• Ensures compliance by sending reminders and, if needed, locking cards until policies are met
• Facilitates reminders to upload receipts, eliminating the need to chase employees for receipts
• Offers a designated email address to send receipts of virtual card transactions
• Allows custom approval workflows and budget limits for physical cards
• Provides alerts for suspicious activity, enabling quick responses to potential fraudulent purchases
• Enables real-time audit trail with receipts, notes, and documentation for transparency
• Automates expense reimbursements to employees' bank accounts once the expenses are approved

Pricing:

Request the sales team for a custom quote

Pros:

• Flexible to accommodate varying team sizes and user base
• Intuitive and easy to use; no training or previous knowledge required

Cons:

• Slow mobile app; takes time to load pages 
• Glitchy SSO-based login 
• Not suitable for complex branch-level approvals and expenses

3. Ramp

Ramp is an integrated solution that streamlines expense management with corporate cards, automated expense tracking, and real-time reporting to help teams track expenses. It is a suitable solution for businesses of all sizes. 

Key Features:

• Provides corporate cards with the ability to add spending policies to prevent unauthorized or non-compliant expenses
• Facilitates customizable workflows for expense approval 
• Enables employees to submit expenses on the go through SMS, mobile app, and integrations with platforms like Gmail and Lyft
• Automates the capture and matching of receipts for every transaction, ensuring accurate expense tracking
• Flags non-compliant expenses, including weekend spend, excessive tipping, and alcohol purchases, reducing the need for manual review
• Provides instant access to real-time spending data, allowing businesses to make timely adjustments before exceeding budgets
• Identifies cost savings opportunities, such as duplicate subscriptions and unused solutions

Pricing:

Offers three pricing packages—free or basic features, $15 per user per month for Ramp Plus, and custom quote for enterprises with features like enterprise ERP integration, custom implementation, and local card issuance.

Pros:

• Unlimited 1.5% cash back on credit card purchases made using their VISA branded cards

Cons:

• Only available to businesses registered in the US
• Doesn’t have a mobile app for Android phones

4. Bill.com

Bill.com simplifies employee expense tracking by providing real-time visibility and customization. It is an expense management solution for SMBs to control all corporate expenses. It streamlines a scattered expense management process with seamless syncing.

Key Features:

• Extends credit limits ranging from $500 to $5 million to control spending within constraints
• Provides custom approval workflows to speed up the approval process with minimal friction
• Offers multiple payment options, including ACH, credit card, check, international wire transfers
• Automates purchase order workflows with the ability to sync and automate two-way matching and three-way matching
• Enables quick coding and sync with accounting systems to streamline expense reconciliation
• Enables automated receipt matching, categorization, and expense reporting, reducing administrative workload
• Offers security features, including the ability to freeze and create corporate cards instantly
• Notifies administrators of each employee's transactions, ensuring timely oversight

Pricing:

Offers a free trial and essentials pack starting at $45 for six standard user roles. Its team and corporate pack are for $55 and $79, respectively. Enterprises need to request a custom quote.

Pros:

• One-click swift payments
• Minimum training required
• Easy-to-use mobile app

Cons:

• Customer support is difficult to initiate, slow, and unresponsive
• Glitches in the reimbursement process lead to pending approvals

5. Rydoo

Rydoo is a cloud-based expense management tool that streamlines reimbursement cycles, automates expense flows, and enhances team productivity. It combines the capabilities of an expense tracker and a travel service, enabling you to book flights and hotels. It is suitable for medium-sized businesses that are building international relationships with overseas offices as it supports multiple languages and currencies. 

Key Features:

• Supports OCR scanning feature for receipt management
• Automates approval flows for expenses based on company policies
• Assures global compliance by setting up rules, mileage rates, per diems, and tax rates for specific countries and regions. Also provides an advanced rule engine for tailored policies in the admin panel.
• Reimburses employees in their local currency, supporting diverse international operations
• Integrates with popular third-party apps like Dropbox, Slack, Uber, Lyft, and SAP
• Supports accounting software widely used in the European Union, such as Exact Online and E-conomic
• Offers full audit trails for maintaining company policies, IRS compliance, and resource conservation with a 10-year data storage period

Pricing:

Offers a team plan at €8 per user per month with OCR scanning and integrations, growth plan at €10 per user per month adding controls and SAP/Oracle integrations, and enterprise plan with API support and custom pricing for ERP and HR

Pros:

• Makes it easier to add expenses in different currencies and get paid in local currency with multi-currency support 

Cons:

• Increases in prices over time leading to significant cost jumps over the years (Source) 
• OCR doesn’t work efficiently and requires manual entry

6. Zoho Expenses

Zoho Expense is a travel and expense management solution designed to cater to the needs of growing businesses. Trusted by thousands of businesses across 150+ countries, it is a customizable expense-tracking tool offering a mobile-first approach, automation, and integration capabilities. Its integration with the Zoho suite makes it suitable for SMBs seeking efficient travel and expense management.

Key Features:

• Provides complete control over all stages of employees' business trips—pre-travel approvals, bookings, and post-travel management with a powerful self-booking tool for efficient business travel
• Offers customization and multi-level pre-travel approval flows along with automated visa requests, documentation, and forms
• Supports expense reporting by auto-scanning receipts for automatic expense creation
• Enables simplified approval processes and timely reimbursements
• Integrates with company cards to offer direct card feed retrieval and automated reconciliation
• Facilitates budget creation and comparison with actual spending with customizable rules to restrict overspending
• Provides AI-driven fraud detection for expense audits with country-specific editions for local compliance and mileage rates
• Supports real-time communication with employees through chat, comments, and notifications
• Integrates with leading travel, HRMS, accounting, ERP, and collaboration solutions

Pricing:

Offers flexible pricing plans, starting with a free option and scaling up to $3 per active member per month, $5 per active member per month, and custom enterprise pricing

Pros:

• Adaptable to global taxation regulations 
• Easy to set up and deploy, very affordable for SMEs

Cons:

• Limited payment gateway integration options
• Can be a little confusing to learn especially when transitioning from app to desktop

Finding the Right Expense Management Solution

Consider these three factors while choosing the right expense management software — ease of use, security, and flexibility. Choosing the right expense management software can help you start your journey towards a healthy financial ecosystem. 

In the end, what matters are your internal policies and controls that govern the expenses. Because no matter what platform you choose, if there are gaps in your internal control systems, the software will not be able to do the heavy lifting. 

If you want more clarity on how you can stop the chaos in your company and manage expenses better, read our detailed post on internal control over financial reporting (ICFR). You can also book a call, and our team will help you better understand the bottlenecks and how you can streamline your expense management.

Not every expense in the company requires you to issue a check. Payments like petrol, supplies, stamps, etc., are paid via cash. For these business transactions, either the employees take cash in advance or put in a request for reimbursement. This mechanism requires you to set some cash aside and employ a person for receipt management and reporting. The cash is referred to as petty cash. 

What Is the Meaning of Petty Cash?

Petty cash refers to a small amount of money that businesses keep readily available for handling minor payments and expenses that are too small to be processed through regular accounting procedures. It is often kept on hand and is reimbursed periodically.

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What are Petty Cash Examples?

Petty cash includes small miscellaneous expenses, such as:

• Office supplies
• Gifts
• Client lunch
• Refreshments
• Postage
• Medicine and first aid
• Minor repairs
• Transportation

What Is the Process of Petty Cash Disbursement?

The first step in petty cash disbursement is to define policies and procedures. This includes specifying:

• The purpose of the fund
• The maximum cash amount 
• The types of expenses the fund can cover
• The process for replenishing the fund

The next step is to appoint a petty cash custodian. They are responsible for handling the petty cash fund. 

Then, you set up the fund by transferring the initial sum of money into a safe or locker. This amount should be sufficient to cover minor expenses for a defined period. 

When employees make small purchases, they request funds from the custodian. After the purchase, they return with a petty cash voucher, receipt, and cash balance. 

The custodian reviews the receipts and provides reimbursement. They maintain detailed records of every transaction, including the date, purpose, recipient, amount, and a brief description of the expense. This record-keeping method ensures transparency and accountability.

After that, the custodian reconciles the petty cash fund at regular intervals. They add up the safe's cash balance and the receipts' value. The total should match the original amount in the fund. 

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What are the Two Types of Petty Cash?

To manage petty cash, the custodian relies on either of the petty cash book systems:

1. Imprest Petty Cash Book

An imprest petty cash system involves maintaining a fixed amount of money in the petty cash fund at all times. 

For instance, you set up a fund of $100. When the fund gets down to $20, the custodian requests reimbursement and replenishes the fund to $100.

2. Columnar or Analytical Petty Cash Book

A columnar or analytical petty cash book is a detailed and structured method of recording petty cash transactions. It categorizes expenses into different general ledger codes for better tracking.

For instance, you create separate columns, such as "office supplies," "refreshments," "meals," etc. Whenever a transaction occurs, the custodian records it in the appropriate column and specifies its purpose.

What are the Challenges of Petty Cash?

While the process of petty cash seems linear and simple, it has many intricacies in practice. 

Imagine the custodian getting hundreds or thousands of requests and receipts every day. So, maintaining a petty cash system is easier in a smaller business with limited expenses and reporting needs. However, for larger enterprises, relying on manual vouchers and physical safes/lockers causes a lot of chaos. 

1. Vulnerability to Theft and Misuse 

Unlike an automated system, a manual petty cash system lacks controls and security measures.

For example, if the custodian is not vigilant, employees can use the cash for personal expenses. Similarly, if the custodian gets stuck between multiple requests and receipts, it leads to oversight.

Moreover, the physical nature of cash in a petty cash box makes it an easier target for theft. Since there's no immediate digital record, anybody can steal money, which goes unnoticed for a while. This lack of transparency and a digital audit trail makes it difficult to identify funds misuse.

2. Poor Receipt Management 

Receipts are the document of proof for the expense. With the traditional approach, custodians have to chase employees for receipts. This results in incomplete or unaccounted-for submissions. 

Moreover, relying on the manual petty cash process makes it harder. The custodians have to manage countless receipts daily, making reconciliation tedious. Hence, you end up with misplaced, duplicate, or even damaged receipts. 

A common example of this issue is when a custodian receives multiple receipts and with an analytical petty cash book to maintain. It takes them hours to reconcile, report, and ensure accurate categorization. 

The worst is when it's time to report, and locating these receipts takes hours.

3. Chaotic Approval Workflow  

In smaller companies, getting approval for expenses is easy. But, in large enterprises, even small expenses can prompt approvals from various departments and stakeholders. This makes the approval workflow complicated and time-consuming. This delays the fund release, disrupting the workflow and reimbursement process.   

For example, imagine an employee who wants to buy a subscription for less than $300. In a big company, it will prompt approval from the manager, IT, finance, and legal departments.  

All this back-and-forth slows things down a lot.

4. Internal Resentment

In big companies, there's tension between the finance team and other departments.  This issue occurs when employees can't access the funds and have to wait for approval. Such a delay disrupts the work or delays the reimbursement.

For instance, an employee needs to buy a subscription for work. But the delay in approval impacted the deadline and client relationship. This creates problems and stress between the finance team and other departments.

5. Branch-Level Petty Cash Management

Large enterprises use separate petty cash systems for departments at the branch level. This means that each department has its own petty cash fund to manage.

Managing small amounts of cash at individual branches is tricky. Employees misuse/steal the money as there's not much oversight. There is no visibility on how money is being spent. Maintaining funds for multiple branches becomes a headache. Also, departments find it challenging to request more funds.  

Reconciliation becomes challenging as the finance teams have to chase branches for complete information. This leaves a lot of loopholes for employees and branch custodians to misuse petty cash.

6. Tedious Reconciliation Process

Reconciliation ensures that the petty cash fund's balance matches the sum of all expenses. 

Manually, reconciliation in large enterprises takes weeks and is prone to errors. Moreover, when adding up expenses, the process is prone to manual errors, which are hard to identify and correct.

For instance, the custodian overlooks a receipt. This mismatch between the recorded expenses and the actual cash on hand can take him weeks to spot errors. 

7. Low Visibility Over Expenses

Traditional petty cash systems lack real-time data. At any given point of time, the custodian is unaware of the fund's current status. This lack of visibility delays financial decision-making. For instance, it can take weeks before the custodian realizes that the petty cash fund is running low. This can lead to temporary cash shortages for essential expenses.

The absence of a clear record makes it slower to notice problems and reconcile the cash. Moreover, transactions and expenses are recorded on paper, which leads to further errors. For example, when an employee uses petty cash to buy office supplies, there will be a delay until the expense is recorded.

Similarly, when many employees spend money simultaneously, tracking them in real-time is tough. This lack of transparency allows employees to misuse petty cash for personal expenses.

How to Manage Petty Cash Effectively With Pluto? 

To overcome the challenges described previously, you can not rely on any automation tool. Instead, you need a product that is tailored to your specific needs. While many tools can assist you in digitizing petty cash management, Pluto goes the extra mile.

With Pluto, you no longer need to maintain a physical safe or countless vouchers and receipts. Pluto records every transaction in real time and gives you visibility at each step. From receipt to reimbursement, you manage everything with complete control and clarity.

Unlimited Corporate Cards

Pluto enables you to issue unlimited corporate cards, simplifying petty cash management. It eliminates the need for physical lockers or safes, promoting smoother cash flow. The availability of unlimited cards allows you to replace shared credit cards. This enables the use of cards for even small petty cash expenses. 

Finance teams get full control and visibility over each petty cash expense in real time.

Employees can either swipe the cards for a seamless process or withdraw cash from ATMs. Every expense made with the corporate card triggers an approval workflow. It prompts employees to add receipts and managers to approve expenses. They can then add the receipts simply via WhatsApp and get reimbursed without any delays.

With all the data consolidated on a single platform, reconciliation becomes easier. This simplified process eliminates the need for a dedicated custodian to manage petty cash.

Not only do you get more control, but you save money with visibility at each step.  

Budget Control

Pluto allows you to specify limits for corporate cards issued. This ensures employees stay within budget. 

When the spending exceeds, employees can request more funds. The budget expands on the manager's approval in seconds, allowing for necessary spending.

Administrators can also issue zero balance cards. These cards with zero balances prompt an approval request for each expense. This approach ensures budget control without causing any delays or resentment.

Easy Receipt Management 

Pluto simplifies receipt management thanks to its seamless WhatsApp integration. 

Your employees can upload receipts via WhatsApp, which are recorded in real-time. The custodians no longer need to run after employees for the receipts.

However, Pluto does more than just store receipts. It extracts vital information through OCR, including vendor names, amounts, and GLs. As a result, your accounting team spends less time on manual tasks like creating logs.

Approval Workflow  

Normally, getting approval for expenses can involve a lot of back and forth. But with Pluto, you can set up custom approval processes to make the process smoother. 

When an employee uploads receipts, Pluto automatically starts the approval workflow. It notifies the custodian and managers to approve the expense, removing the friction.

The reimbursement process accelerates without any compromise on efficiency.

Further, Pluto uses OCR to detect duplicate receipts to avoid dual payments and fraud. This makes it easier to double-check expenses and approve the legitimate ones. 

Digital Expense Report  

Pluto offers digital expense reports that compile data from all the receipts. 

The report simplifies the task for your finance teams to see how each branch/department is spending. It enables them to make adjustments to policies and procedures as needed.

For instance, a company has small office supply purchases spread across various departments. Pluto's real-time visibility and report help to locate these costs. As a result, finance teams can reconsider and promote bulk purchases for cost savings. 

With Pluto, the custodian gets complete visibility into the expenses and the available funds at all times.

Close Books 10X Faster  

Pluto simplifies the process of closing books. 

Since employees can submit receipts directly through WhatsApp, custodians don’t need to chase employees for receipt submissions. This enables you to close the book 10X faster by accelerating the reconciliation process.  

Pluto records all transactions in a centralized digital platform. This streamlines audit logs and eliminates the need to maintain physical records.

With its OCR-based receipt retrieval, finding specific receipts and information becomes more effortless. This simplifies the reconciliation process, making the entire book-closing process faster. 

Replace Petty Cash With Corporate Cards

Small expenses and cash transactions can not be removed. However, finding an expense management tool can make petty cash management simpler. 

Stop relying on manual traditional processes to manage petty cash. Choose Pluto to replace your tedious petty cash books and vouchers with corporate cards. 

Sign up today to digitize your petty cash for complete visibility and control.