How to Collect and Track Payments Like a Pro with Virtual Account APIs| North Loop Official Blog
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North Loop
22 Dec 2020

How to Collect and Track Payments Like a Pro with Virtual Account APIs

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Introduction -

For a business that receives several inward payments from multiple sources, tracking the origin of each one of them over a long period can be quite burdensome. It can also become a tedious process for your team to do it manually by tracking the payments with UTR numbers.

What are Virtual Accounts, and what can they do for you?

Virtual Accounts are essentially a series of dummy accounts. You can use them for making and receiving payments on behalf of one physical account.

You can also use these non-physical bank accounts or ‘shadow accounts’ to reconcile payments in real-time and also assign them to each of your paying customers.

Virtual accounts APIs can allow you to create unique account numbers for each of your customers from whom you receive payments. The customers can use them to make the payments, and as soon as the funds reach your bank account, you can get all the details of the transaction.
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What are the benefits of virtual bank accounts?

Some of the benefits of virtual bank accounts are as follows - For corporates with domestic cash inflows and those with cash coming in from different legal entities and denominated in various currencies, virtual bank accounts can streamline the cash management process. It can also reduce the manual work pressure on your staff and even minimise the investment in ERP systems.

It allows banks to remain in control of the physical account while creating several shadow accounts that can be easier to manage. With payments and collections getting routed instantaneously to a linked master or physical account, the complexity reduces, thus increasing its efficiency.

Some other benefits of virtual bank account -

Substitute for liquidity management tools
Increased cost efficiencies
Improved reconciliation process
Simplification of account and banking relationships
Centralising of treasury functions
Let us now look at how virtual account APIs helps different types of businesses in collecting payments through multiple modes -

Educational institutions -

Fee collection is a big challenge for all schools and colleges. However, with the help of virtual account APIs, you can easily automate the process by assigning unique virtual account numbers to each student. You can reconcile any payment made by the students using these virtual IDs and avoid mapping the inward transactions.

B2B E-distributors -

B2B E-distributors deal with numerous retailers and receive multiple inward payments every month. Manual reconciliation of all these transactions can be a very tiresome task. However, by using virtual bank accounts, you can get instant notifications along with payer details every time funds get transferred to your account through the virtual account numbers of each retailer.

NBFCs -

Mapping multiple loan repayments that NBFCs receive via bank transfers is another task that can be very strenuous if done manually. With the rise in consumer-durable loans, the problem has only intensified, and there is an increased need for smart solutions to reduce the redundancy and repetitiveness of the process.

Virtual bank accounts are of immense help in this aspect as they make the process easy by allowing batch allotments. These are a series of virtual accounts that are unique to the company. Every customer gets allotted a virtual account number from this series so that APIs do not need to get hit manually every time a new customer gets added.

On any loan repayment transaction, the virtual account number gets mapped back to the customer who has made the payment to get all the required customer details.

You can open a virtual bank account with North Loop. It provides a smart way to collect payments for all types of businesses and offers the numerous benefits that come with a virtual bank account. You can improve the reconciliation process of all your inward transactions, reduce the expenses spent on ERP software systems, and simplify the cash management structure.

Conclusion -

Virtual bank accounts provide the flexibility to structure and segregate data effortlessly. Moreover, they skip the time-consuming and paper-intensive process of opening, closing and altering of physical accounts. Therefore, if you want to collect and track payments like a pro or enjoy a smarter solution to several business banking problems, virtual accounts can be a suitable option.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.