Divvy! Your Nonprofit Credit Card Solution
Credit cards always seem to be a sore spot for nonprofits. Yet they are often essential for staff to carry out the organization’s business.
Is it possible to make credit card administration any easier? First consider all these credit card management problems.
Credit Card Sore Spots
1. To manage physical credit cards, some organizations use the “library” approach. They have people “check out” the card when they need to buy something. What happens if someone else needs the card while it’s out? What if the card gets lost? How do you enforce accountability?
2. Credit cards are vulnerable to fraud. Fraudsters can rack up charges depending on the card’s credit limit and how fast the card issuer or organization catches the unusual spending pattern and shuts off the card.
3. Credit cards expose the organization to fraud from within the organization. More than once we’ve seen organization cash stolen via credit card. We even blogged about it here.
4. Whenever you get a replacement card you must set up a new card number on all the online vendor accounts that rely on it.
5. If you accidentally underpay the total card balance one month, all your charges now are subject to interest expense at crazy high rates.
6. Opening a credit card account often require someone’s social security number and puts that person on the hook personally to pay the card liability.
7. Credit cards can be difficult to administer or close if the person who opened the card leaves the organization. (We have a client with a “phantom” Amex card that, despite hours on the phone with the Amex service desk, they have not been able to close out since the person who created the account left.)
8. Individuals who use a credit card need to submit receipts for purchases. Are you still requiring credit card users to tape receipts to a sheet of paper for submission to bookkeeping?
9. Sometimes individuals need to indicate the account number and/or grant on charge purchases. Are they waiting for the monthly credit card statement so they can rack their memory for the information, then write it on the statement for the bookkeeper?
There has to be a better way!
And finally we found one. It’s called Divvy.
Divvy is a business expense management solution owned by Bill.com that includes two main components:
1) Physical and virtual Visa charge cards and
2) Expense and management software that tracks spend from those charge cards.
Divvy makes credit card administration easier for management and for card users.
For starters, Divvy bases approval for nonprofits on the organization’s application only. The credit line is tied to the organization, not an individual. Therefore Divvy does not require a personal guarantee from anyone who works at the organization.
And while Divvy can’t eliminate fraud, the service can help you minimize risk and damage if fraud does occur.
Before we go any further, you are probably asking, “How much is this going to cost me?”
We are happy to report that Divvy is free. Divvy makes their money from the interchange fees charged to merchants who accept the card in payment.
So with that, let’s talk about some of Divvy’s features.
Integration with QuickBooks
Divvy has been available for integration with QuickBooks Online for about two years. Integration with QuickBooks Desktop is expected to be available later this year.
Credit Card Issuance
Divvy lets one or more administrators set up credit cards with associated budgets for staff or contractors who need the cards.
Imagine that! You have the power to issue cards for your organization whenever you need to. You do not need to go through someone in customer service at the card issuer.
And if someone leaves the organization, the Divvy admin can simply delete the user from Divvy to inactivate their cards. You can also easily delete a card if you want to stop paying a vendor or in case of fraud.
Physical vs. Virtual Cards
Divvy lets you set up physical credit cards which are issued to card users. These are Visa cards just like the credit cards you’ve always used.
In addition, you can create virtual cards for card users in your organization who need to make online purchases or pay for online subscriptions.
You can also create a virtual card to pay for just one thing, like a software subscription. Since that is the only expense charging to this card, a problem with any other card will not affect it.
You can set a card expiration date. You can even create a one-time-use virtual card for someone who is not normally a Divvy user.
Card Budgets – The Key to Control
Each card, physical or virtual, must be associated with a budget. The budget is how you control spending. You can either monitor all spend within a single budget or create additional budgets to provide more control over various types of spending.
Budgets can be organized by team, department, project, event, or other purpose. Each budget has a limit that you can choose to reset every month, quarter, or year. Admins can also add spenders and virtual cards tied to a specific budget.
The budget ensures spending will never get out of control. You define how much can be spent before it ever happens.
All Divvy users can access the Divvy platform from a web browser or the Divvy mobile app. Divvy admins can view and manage transactions from all charge cards in their organization, send funds to spenders, and control settings of their account.
Divvy spenders can view and categorize their transactions, attach receipts to transactions in Divvy and create virtual cards for their budgets.
The organization has control over how they set up their Divvy environment.
You can set up Divvy so users are required to attach a receipt over a set dollar amount to each purchase. Card users can take a picture of their receipt with their phone or have a receipt sent to Divvy electronically. If a receipt is missing or not available, the user can add an explanation of why the receipt is absent.
If enabled, users can also categorize purchases to accounts and even to grant customers. This process can improve accuracy of financial reports and grant administration since the purchaser should know exactly what they bought, the purpose, and funding source.
Divvy offers convenience and control over credit card management. All without additional cost to your organization. What’s not to like?
Please know that if you sign up for Divvy from one of these links, we will receive an affiliate referral fee. If you decide to get Divvy, we greatly appreciate your support of our blog. And we’d love to hear how Divvy works for you!