Virtual Accounts for Singapore Businesses: Complete Guide to Streamlining Business Payments

Virtual Accounts allow businesses to simplify transactions and keep track of payments efficiently. But what exactly are Virtual Accounts, and how can they benefit businesses in Singapore?

Whether you're looking to simplify your accounting process, or improve efficiency, this guide will help you understand how Virtual Accounts could transform how your business manages and keeps track of transactions. We'll also explore how Wise Business allows businesses to transact globally while keeping foreign transaction costs low and financial records clear.

What is a virtual account?

A Virtual Account (VA) is a non-physical account that can be created and assigned to customers, vendors or business partners, and used to simplify tracking of payments from multiple sources.

Virtual accounts are linked to a master business account where funds are stored, and they work just like any traditional bank account which allows you to receive and send funds. Each VA has its unique account number that is often customisable for easy identification.

Details from VAs can be summarised in reports that clarify the purpose of every transaction, allowing for faster and more accurate reconciliation of payments.

How do virtual accounts work?

If you receive a high volume of payments from multiple clients and partners frequently, you would be familiar with the hassle of trying to match those payments to their related invoices. Virtual Accounts remove that headache.

Think of Virtual Accounts as sub-folders in your computer that let you categorise payment transactions for easy tracking and reconciliation. Each of these sub-folders can be dedicated to a specific vendor, client or supplier, along with the option to determine its base currency. Every transaction is stored in its appropriate sub-folder.

Instead of having to sieve through countless transactions every month, you can now generate a ledger of transactions with details from your Virtual Accounts. This makes it easier and faster to get a clear idea of how your business is doing.

Here’s how you can set up Virtual Accounts for your business in Singapore.

1. Set Up a Master Account

A Master Account or main account simply refers to the main corporate account where your funds are stored. This can be created with banks or with fintech companies like Wise Business.

• You will need to provide details of your business in order to create a master account, and set-up fees may apply.
• You should also note that not every corporate bank account offers the feature of creating virtual accounts, so remember to check with your corporate account provider before proceeding.

2. Create Virtual Accounts

Once your master account is accessible, you can start creating virtual accounts. The process varies depending on the institution of your master account.

Some like DBS Virtual Account offer the ability to create VAs instantaneously by logging into your business account¹, while others like CIMB Virtual Account may require you to submit VA creation forms by email².

Each VA often comes with a unique account number which you can share with your clients or vendors to collect or make payments.

💡 Remember to name each virtual account appropriately, or keep a record of the corresponding VA numbers to ensure that transactions are easily identifiable.

3. Automatic reconciliation of transactions

When you receive payments through the unique VA numbers, the transaction is recorded along with details from the VA. All transactions will be automatically reconciled with details such as who made the payment, how much was received, the related invoice, etc.

Reports with such details can be generated, saving hours of work previously required for manual reconciliation of payments. If you’re using third-party accounting software, you may have the option to integrate your reports into your accounting process as well.

Why your business needs virtual accounts

Keeping track of cash flows can become a confusing and complex process quickly as your business grows. There will come a point where manual reconciliation gets too slow and produces too many errors. Virtual accounts help businesses with high transaction frequencies to keep a finger on the pulse by offering the following advantages:

1. Reconcile transactions efficiently: Payments are automatically recorded and matched to clients and even invoices in some cases. This eliminates manual reconciliation and reduces errors.
2. Simplified cash flow management: By assigning unique virtual accounts to different customers, vendors, or business partners, you can easily track where money is coming from and going. This real-time visibility gives you a clear bird’s eye view of your cash flow and helps in budgeting and forecasting.
3. Ease of multi-currency management: If you work with clients and vendors globally, some virtual accounts may allow you to receive payments in multiple currencies. This reduces the need to manage multiple accounts from various providers while offering the ability to track all payments in one place.
4. Less fees: By keeping transactions within a single master account, you could enjoy savings in administrative fees. Some examples include set-up fees or fall under fees which are common costs you have to bear when managing multiple accounts.
5. Enhanced security: With fraud on the rise³, the use of VAs minimises the need to share details of your master account frequently, minimising risks of fraud and security breaches.
6. Scalability: The ability to create VAs digitally for each new client or partner allows you to scale faster and with greater confidence. You can do away with multiple trips to the bank or being bogged down by the administrative work of tracking the increasing volume of transactions.

Conclusion

Virtual accounts offer SMEs, startups, and enterprises in Singapore an easier way to track payments from multiple sources.

Many businesses use them to automatically reconcile their payments and receivables by creating unique virtual accounts for every client, vendor or partner. This eliminates the need for manual reconciliation which helps save time and reduce possible errors. The ability to consolidate such transactions in a single master account also helps save on extraneous administrative fees and miscellaneous costs.

• Save when you pay suppliers and vendors overseas, always enjoying the mid-market rate with a low conversion fee
• Say goodbye to monthly and annual fees
• Account setup is easy - done in minutes and it’s all digital
• Plus, with Wise Business you can use our free invoicing tool to create, send, and reconcile invoices seamlessly, saving you time and eliminating administrative tasks and potential errors

➡️ Get Started with Wise Business today

Sources checked on 22nd February 2025