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CFO and Treasurers: how virtual IBAN accelerates and secures payment flow management

Tracking payments is a daily challenge for many businesses, with potential risks that can impact their treasury. However, the emergence of virtual IBANs offers an innovative solution to expedite and secure these processes. From simplifying accounting reconciliations to reducing fraud, all while freeing up valuable time, discover how virtual IBANs have become an indispensable ally for finance teams.

Tracking payments: a daily challenge impacting overall company performance

Managing a significant volume of payment flows poses a serious challenge for companies, especially when it comes to reconciliation work. The matching operation between incoming payments and existing invoices is a major risk for the company’s treasury, especially when the finance team lacks automation and tracking tools.

• The time taken for prolonged verification slows down the identification of unpaid invoices, resulting in financial losses for the company.
• These tedious and time-consuming checks deprive teams of valuable time that could be dedicated to more value-added tasks. They also lead to human errors that can incur additional costs.
• Lack of visibility also affects business teams, suffering from a lack of information about their clients’ situations.

Virtual IBANs: a simple way to automatically organize financial flows

For companies dealing with significant payment volumes, the use of virtual IBANs provides a solution to trace, differentiate, and automatically organize all their financial flows.

How does virtual IBAN work in practice?

Virtual IBANs are alternative IBANs that redirect financial flows to the company’s main IBAN. With this technique, the bank account can be connected to multiple IBANs that authenticate incoming transfers without requiring the payer to enter a payment reference.

Depending on its needs, the company can assign a different virtual IBAN per payer, per invoice, or per payment transaction to automatically reconcile incoming transfers and facilitate and secure its accounting.

Virtual IBANs are mainly used to receive funds, but it is also possible to issue them to secure direct debits. The company can provide specific virtual IBANs per supplier, designating the authorized supplier for direct debits. This automatic categorization allows the finance teams to automate and expedite outgoing flows.

More concretely, virtual IBAN in two use cases

In Retail: automatically identifying revenues by store
Context: Revenues from a retailer specializing in the sale of glasses come not only from purchases made in its stores in France but also from reimbursements executed by the Primary Health Insurance Funds (CPAM) and mutual funds following purchases. Regardless of the store where a purchase was made, the reimbursement arrives in the company’s main bank account.
Problem: Transfers from Social Security and mutual funds do not contain an explicit reference to link them to a specific store or customer, complicating the tracking of revenues from each store.
Solution: By creating virtual IBANs for each store transmitted to Social Security and mutual funds, transfers are already categorized by store.

In Travel: automating the reporting process
Context: An airline wants more accurate sales statistics, especially based on the profiles of its buyers.
Problem: To obtain these data, the finance team must send monthly sales to the marketing teams, and manually, the operational teams conduct analyses, a time-consuming and error-prone process.
Solution: Implementing virtual IBANs to link each customer to a specific category has automated the reporting process, saving time for finance and marketing teams.

In summary, 4 reasons to use virtual IBANs

Benefit #1: Simplicity and reliability of accounting reconciliations

With a virtual IBAN, the source of an incoming payment is directly identified, even if the payment does not have any reference. The finance team no longer needs to enter the payment reference to find the invoice or deal with payer input errors.

Benefit #2: Optimization of reporting through automatic transaction sorting

Since each customer can be associated with a unique IBAN, it is possible to sort each of their transactions. Accounting teams can set up reports, measure and compare collection volumes, and identify abnormal transactions.

Benefit #3: Real-time tracking of incoming payments

By associating each incoming payment with a virtual IBAN, each customer’s payment can be traced to determine its exact status. In the retail sector, for example, this allows anticipating the preparation and shipment of orders.

Benefit #4: Reduction of fraud by securing bank details

Sharing the main IBAN with all customers increases risks. To ensure the confidentiality of bank details, the company can create virtual IBANs, which will be transmitted to customers or creditors instead of the main IBAN.

And for those who prefer visuals 😉, the highlights in a video

Now, you know all about virtual IBANs! All that’s left is to see it in action, in a one-minute video:


And to learn even more, you can check out the product page for virtual IBANs:

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