VTransact DigiTB – Virtual Account Management
VTransact DigiTB’s Virtual Account Management (VAM) solution simplifies liquidity management by consolidating multiple physical accounts into a centralized virtual account. This approach streamlines cash management, payment reconciliation, and fund movement tracking. With real-time fund monitoring and a multi-tiered reporting structure, it enhances compliance and provides both banks and corporates with a clear, comprehensive overview of their funds, enabling more informed decision-making.
COBO & POBO Models
Our COBO (Collection on Behalf of) and POBO (Payment on Behalf of) models centralize the initiation and reconciliation of receivables and payables. These solutions improve efficiency, reduce the need for multiple accounts across locations, and offer integrated services with consolidated reporting and pay-out capabilities. By utilizing in-house banking and SWIFT messages, the models ensure secure and transparent fund flows, minimizing fraud risk.
Connect with Our Payment Experts
Key Capabilities:
IBAN/Non-IBAN Handling
- Manage virtual accounts using IBAN or non-IBAN formats.
- Create and manage accounts across various countries and currencies.
- Organize accounts in a multi-level hierarchical structure.
- Create virtual accounts dynamically for direct invoice presentment.
- Create virtual accounts from your corporate portal using APIs
- Generate transaction reports in standard (MT940) or custom formats.
- Allocate and control funds with comprehensive budgeting and limits.
FAQs
VAs are temporary, electronic account numbers linked to a designated “Real” account, typically held by a business or financial institution.
They function as sub-accounts that facilitate specific transactions or segregate funds for various purposes. VAs do not physically hold funds; instead, they act as conduits for directing transactions to the master account.
Each virtual account provides the same data segregation, balance analysis, and transaction identification as a real account does. However, the administrative cost for opening and managing virtual accounts will be significantly lower than for physical accounts.
In addition, bank fees for keeping up virtual accounts and transferring money between them have to be far less than those for real accounts. When opening hundreds, perhaps millions, of virtual accounts becomes feasible, it would be unimaginable to do so with real accounts.
Businesses are able to autonomously manage virtual account structures according to their own requirements. Simultaneously, the advantages of control, visibility, and reporting that accompany a physical account structure are preserved.
Virtual Accounts smarter, leaner treasury function, allowing treasurers to concentrate their time on more strategic activities such as managing interest rate and FX risk, forecasting future cash requirements, and provisioning cash for current requirements. Their VIA solution will help streamline and automate time consuming tasks, while making others redundant altogether. Virtual accounts can benefit treasurers in five major ways
Account rationalizationVirtual accounts eliminate the need for an organization to keep multiple accounts at different banks in order to handle funds across business lines and legal entities. This can make it easier to manage bank accounts.
ReportingBecause virtual accounts are more flexible, they can be configured in whatever way makes the most sense for the organization—unhindered by the administrative restrictions that physical accounts have. Virtual accounts can track and report cash at very granular levels within an organization, such as at the product or even client level.
Receivable reconciliationVirtual Accounts can be powerful tools for streamlining receivable reconciliation, offering several key benefits including- Automatic Identification by assigning a unique VA/vIBAN linked to the main account, incoming payments can be automatically identified based on the IBAN used. This eliminates the need of manual matching based on reference number or descriptions, which can be prone to errors and time-consuming
- Businesses can associate Virtual accounts to specific categories. When payment arrives through a designated Virtual Account, it is automatically categorized, saving time and effort.
- With automatic reconciliation, identification and categorization, the risk of human error is considerably reduced/minimized
- With real time transaction data, Business get an improved visibility and control over their finances
Virtual accounts can enable corporate treasuries to centralize cash without the need for complex sweeping structures, thus helping provide better funds availability, optimized account balances, and effective cash forecasting.
Flexible virtual account structures help organizations to efficiently manage balance contribution and funds availability for each entity, lend working capital cash to subsidiaries efficiently, and implement rule-based interest allocation, all without cash leaving the actual bank account
Payment FactoriesBy leveraging the potential of Virtual Accounts, businesses can establish efficient payment factories to optimize cash flow, enhance security and streamline financial operations.
On behalf of structures and in-house bankingVAM provides clients the ability to run centralized treasury functions without requiring large bank account networks. Additionally, virtual accounts can be utilized for default tracking of intercompany positions, concentration of cash, balance optimization, and also provide ability to leverage gross accounting between entities rather than net accounting
- Fixed: These accounts have a single, permanent Virtual account number. They are often used for recurring payments or subscriptions
- Dynamic: These accounts generate a new Virtual account number for each transaction. They help prevent fraud and protect customer
- Single use: These are accounts designed for single transactions such as paying a vendor
- Multi use: These accounts are used for multiple transactions. Often used to manage project budgets and paying employees
- Escrow Virtual Accounts: These accounts are used to hold funds in trust until certain conditions are met.
- International Virtual Accounts : These are IBAN enabled Virtual Accounts which allows business to collect and make payments to customer in different currencies
- -Numeric Identifier: These identifiers can be sequential, randomly generated or Bank specific schemes
- -Alphanumeric Identifier: These identifiers can be randomly generated alphanumeric strings, custom formats for identification project specific accounts and International IBANSs supporting standardized format for international payments.
