U.S. Software Companies Are Now Charging Sales Tax: How Will This Impact Startups?

Recently, many U.S. software companies have started adding sales tax to their software-as-a-service (SaaS) subscriptions. If you’re a Canadian startup who often uses U.S.-based software, then you’re probably wondering how this will affect the way you purchase, monitor and record these types of expenses. Don’t worry, we’ve got you covered. 👊🏻

When a SaaS company sells its product or service, they are required to comply with the tax laws in the region in which they are located. Depending on the state they’re in, these subscriptions may be taxable. For example, New York and Arizona require sales tax on all SaaS purchases, while California and New Jersey do not. Given that these tax rules are constantly changing, it’s important to keep tabs on how your SaaS subscriptions may be impacted. 

How are we supposed to keep up with varying tax rules on SaaS subscriptions? 

Well, with virtual cards we don’t have to. The truth is, physical corporate cards and traditional expense management software aren’t designed to track and monitor the growing use of SaaS subscriptions and the changing tax rules that come with them. Using virtual cards, startups don’t have to worry about these types of legal changes and can instead focus on what really matters — growing their business! 💸  When startups use virtual cards, all of the heavy lifting is done for them. When integrated with smart spend software, SaaS subscription purchases and applicable taxes changes are automated and calculated for you — it’s that easy 😉! For Canadian startups purchasing U.S. software subscriptions, each transaction gets processed and recorded instantly upon purchase and the tax is converted from USD to CAD in real time. This not only reduces mistakes in tax calculations, but it minimizes the overall time spent on expense management. 

And for those who may be weary about virtual cards due to the potential risk of fraud, not to worry! If your card is compromised, you can instantly cancel it with a click of a button and your remaining balance will be completely secure. 🔐

At Float, our virtual cards support startups with all of the above. Tedious changes like tracking SaaS purchases and monitoring tax rules are all taken care of through our smart spend software. We’ve removed all of the guesswork, so you can officially put your calculators away. 🎉 

We also understand that time is of the essence, especially in the startup world. That’s why our virtual cards are issued instantly and on the spot. Say goodbye to snail mail 🐌. Not to mention, Float enables startups to distribute as many cards as you need in less time, giving you the power to establish employee spending limits for greater control and oversight on your company financials.

Oh, and let’s not forget…Float’s onboarding process is quick and simple – so fast that we can have your entire team onboarded in one week! 🏃🏻‍♂️💨

To learn more, contact us to sign up for a demo today!

How Corporate Cards Can Benefit Startup Companies

One of the biggest hurdles many Canadian startups face is a lack of capital. In fact, approximately 20% of them can fail because of this. With things moving so rapidly, it can be difficult for startups to manage accelerated growth, increased spending and simply knowing where all of their funds are going. 

The good news is that we have a solution and it’s a compact one. Corporate cards — virtual and physical — serve as a key tool that many startups can use to manage business and employee growth, easily make purchases and effectively monitor their spending. And, when integrated with smart, automated financial software, the benefits are on a completely different scale. Here are a few:

It increases operational efficiency so your team can actually get stuff done

For many startups, finding an optimal solution for financial and expense management can be a challenge. From long expense reports and employees forgetting to submit receipts to tracking purchases from multiple sources — the list is long and it goes on and on. However, it doesn’t have to be this way. Corporate cards linked to smart, automated spend software can simplify those daily accounting tasks by centralizing your expenses and financial data all in one place. 

This gives employees the freedom and flexibility to make critical purchasing decisions faster, without having to wait for management approval on purchases or spend requests as transactions and category spending can be authorized instantly. Corporate cards are also an express ticket to innovation, giving startups the capital to quickly act on their creative ideas and go to market with them. ✅

It increases financial accuracy and reduces human error

As we know, the traditional process of managing business expenses is manual, time-consuming and not exactly efficient, leaving more room for error and in some cases, financial loss. When employees pay for items themselves and submit expenses through screenshots and loose copies of receipts, it becomes difficult to track, monitor and validate real-time spending.

Luckily, when corporate cards and smart spend software come together, they’re a force that can’t be reckoned with. 💪 All transactions on these cards are recorded in real time and automatically matched to their respective receipts. Not to mention, this technology also prompts employees to submit receipts upon making a transaction so no one has to be chased down come month end. Having your books in order on a monthly and quarterly basis grants startups more strategic oversight to plan for the future and more opportunity for cost-savings. Your VP of Finance will thank you later.

It creates a culture of healthy spending

Promoting a healthy spend control culture is critical for startups – one where a team can focus on providing value, while also being mindful of how their daily spending decisions can impact the overall business. Having access to capital – especially for startups — is essential for their ongoing growth and stability. By providing every employee with a corporate card, startups can empower their teams to make valuable spending decisions, while instilling greater trust and encouragement to view corporate spending in a more collaborative, mindful and honest way. 

On the flip side, leaders are able to create spend controls for specific categories, departments and employees to both limit and monitor spending. It’s a great way to keep day-to-day business operations running smoothly, prevent expense fraud and keep a close eye on where funds are going and why.

At Float, we provide startup companies with a hassle-free solution to simplify and optimize the way your team spends, tracks and manages your money. Backed by automation software, our corporate cards are approved in one day and delivered to you within three. No archaic banks, no wait times and no complicated processes involved. (We weren’t kidding when we said hassle-free 😉).

If you’re ready to take action and get the Float cards you need to elevate your startup, connect with us today! 

What are Virtual Cards?

Virtual credit cards represent an innovative evolution in the realm of financial technology, offering a digital alternative to traditional plastic cards while retaining all the functionality and benefits of their physical counterparts. These intangible financial instruments operate on the same fundamental principles as conventional credit cards, allowing users to make purchases and conduct transactions both online and in physical stores that accept card payments.

The key distinguishing feature of virtual credit cards lies in their lack of a tangible, physical form. Unlike traditional credit cards, which are typically manufactured from plastic and embossed with relevant information, virtual cards exist solely in the digital domain. This unique characteristic brings with it a multitude of advantages, chief among them being the immediacy of access.

Benefits of Virtual Cards

  • When a customer issues a virtual credit card, they receive their card details instantaneously. This includes the card number, expiration date, and security code – all the essential information required to make purchases. This immediate availability stands in stark contrast to the process associated with physical cards, where approved applicants often face a waiting period of several days to weeks for their card to be produced, shipped, and delivered via postal services.
  • The digital nature of virtual credit cards also introduces an unprecedented level of flexibility and control over one’s financial resources. Users have the capability to generate multiple virtual card numbers, each linked to their primary account but operating independently. This feature allows for the creation of numerous cards, each with its own predetermined spending limit. Such granular control empowers consumers to better manage their expenses by allocating specific amounts to different virtual cards for various purposes or categories of spending.
  • Moreover, the ability to create multiple virtual cards significantly enhances security measures. By using different virtual card numbers for different merchants or types of transactions, users can effectively compartmentalize their spending. This strategy minimizes the risk associated with potential security breaches or unauthorized uses of card information. In the event that a virtual card number is compromised, the user can simply deactivate that particular number without affecting their primary account or other virtual cards.

This approach stands in stark contrast to the use of a single physical credit card, where every transaction potentially exposes the user’s entire credit limit to risk. With virtual cards, users can limit their exposure by assigning only the necessary funds to each virtual card, thereby safeguarding the majority of their credit limit from potential threats.

Drawbacks of Virtual Cards

  • Virtual cards are intended to protect your identity and information online and are not designed to be used in person at stores. Depending on your use case, virtual cards may not act exactly the same as the physical credit cards you are used to.
  • Getting your hands on Virtual cards in Canada can be difficult, most of the banks in Canada do not offer virtual cards.
  • Finally, you cannot make ATM withdrawals using a virtual card. Most virtual cards cannot be used to withdraw cash from ATMs, limiting access to physical currency when needed.

Virtual Cards for Business

Virtual cards are very useful for businesses who need to let employees use company money. The business can an unlimited number of virtual cards to employees with limits and expiry dates to manage their spending. This not only makes it easier for employees to spend company money and not spend out of pocket, it also ensures that the company credit card info stays safe. Furthermore, during these times of working from home, virtual cards are 2 meter apart compliant!

So if you’re looking to upgrade your business spending practices, try the virtual cards and spend management software Float.

Still Sharing Credit Card Details over Slack?

Working from Home 🏘️ – the new reality

The transition to the work-from-home environment hasn’t been easy for anyone. With teams becoming distributed overnight, many businesses didn’t have a chance to adjust their internal processes to the new reality. One such process is managing and sharing corporate cards.

What most companies do right now

Today, many of the companies share their cards online via slack or other messengers without thinking about the repercussions… Is this a familiar sight?

Sharing cards over slack is NOT good!

Why is this bad?

Solution – password managers

Some companies have created a process around card credentials sharing with password managers like 1Password or LastPass. However, this approach doesn’t guarantee that your employees won’t overspend or keep the password credentials after they are done with the purchase! Do you often go over budget on credit card spend? This might be the reason why!

In addition, it’s still a pain to reconcile expenses when you don’t know who is making transactions on your cards and who has the receipts to them.

A better solution – Approval workflows with Virtual cards 💳

Have you heard about Virtual cards?

Virtual Cards are like Visa credit cards that you have in your wallet but they only exist online. The merchant doesn’t know this, they think it’s just a credit card. What’s the benefit, you might ask?

  1. Every time you create a new virtual card, Visa generates unique new card number for it
  2. You can create unlimited virtual cards and don’t have to wait for them to be shipped – you can spend instantly!
  3. You can set independent limits on each virtual card
  4. Virtual cards can be issued and cancelled in seconds – without having to deal with a bank

Moreover, when paired with a smart approval process, you can essentially eliminate personal reimbursements in your company. Instead of your employees paying out of pocket just to be reimbursed later – create a one time virtual cards with a limit and let them spend from that card. Employees will never overspend and you won’t have to deal with reimbursement paperwork!

Where to get virtual cards?

Hmm… this might be the million dollar question. This must be your lucky day though, because Float has them!

Float virtual cards come with:

  • Robust access controls for each card
  • Smart, fully digital approval workflows
  • Accounting integrations to help you keep track of all your expenses
  • Reporting to get real-time visibility into your expenses

With Float you can eliminate out of pocket expenses in your company, saving time and money.

Escape Marketing Excel Hell

Let’s look at some facts:

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This means that the companies must get better at tracking the impact of their marketing spend and empowering their marketing teams with the right tools/workflows. So what are the problems marketing teams are facing today?

Problem 1: How much do I have left to spend?

With many finance workflows happening at the end of the month, teams usually don’t have real-time reporting on their spending. This means that your marketing team most likely does the following:

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What makes this worse is that, from interviews with marketing specialists, the marketing teams are forced to assign one of their colleagues on expense tracking duty. This usually takes up a lot of their time and clearly isn’t the most exciting activity of their day.

Problem 2: Reconciling expenses with T&E expense workflows

One job that a marketing specialist should not do, is reconcile expenses – that’s the role of the finance team. Yet, some marketing teams are forced to use T&E-like workflows from Concur, Intact, etc. which were designed to capture diverse expenses that occur on a sales trip.

Current workflow:

  • Create an expense report
  • Write out charges as line items for each campaign
  • Attach invoices
  • Categorize transactions
  • Match expense to transaction from the bank statement

This workflow is extremely inefficient and clearly wasn’t designed for marketing expenses. Oh and by the way, online advertising platforms charge you on daily basis, so you have to do this EVERY DAY just to keep up with your spending. Not great… 😢

Possible solutions

Excel sheet

Marketing needs to keep their own books: an excel sheet that you need to update every day with daily campaign spend from all accounts across the entire team. This will require someone to spend hours every day collecting spend from all accounts and will cost a fortune in inefficient use of labour. Excel sheet is more like a flex tape.

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Virtual cards 🌈

A much better approach is to use technology that was designed to solve this problem. Virtual cards have been built for the trucking industry to get visibility over trucker’s cashflows. Similarly, in marketing virtual cards can offer a lot of benefits:

  • Real-time spend visibility – you are always in the know how much you’ve spent
  • Set and forget – label a virtual card with accounting tags once and all transactions will be automatically tagged for you
  • Spend control – assign cards with limits to employees, campaigns or channels to always be aware of where the money is going
  • and more… flexible limits, easy receipt capture, secure payments, easy card sharing

So the virtual cards can automate all of the accounting for your marketing team and relief the pressure off the finance team’s reporting function!