For small businesses, the traditional purchasing process can be time-consuming and costly. To make even small purchases, employees must normally start by completing requisition forms for the needed items. The forms must then be approved, and purchase orders must be completed. An invoice is then submitted from the supplier, and a check must be issued.
The processing costs for this traditional process can be high, and they are the same regardless of the value of the items that are purchased. According to the NAPCP which is the Professional Association for the Commercial Card and Payment Industry, businesses that choose to switch from the traditional method of purchasing to procurement cards may enjoy savings of up to 80% on their procurement processes. The average per-transaction savings that the NAPCP found was $63.
What is a procurement card?
Procurement cards are credit card numbers that are issued by the card issuers to a company’s employees. The numbers are based on the company’s existing debit or credit card infrastructure but don’t allow employees or internet thieves to access the accounts. The businesses are able to place controls on each card such as limiting the amount of money that can be spent by the day or week, limiting the spending to preselected merchant categories, turning the cards off during certain hours, and others.
What makes a virtual procurement card important?
A virtual procurement card can help to control expenses and to prevent both internal and external thefts. Since the numbers are randomly generated and cannot be used by thieves, the business can be protected from fraud. Employees are not able to make fraudulent purchases because of the spending controls. The business can benefit by preventing errors during manual data entry, saving time and avoiding the problems that can happen with long reimbursement expense and purchasing processes.
How does it relate to a business needs?
Virtual procurement cards address several business needs. Many small businesses rely on their employees to make purchases out of their own pockets when items are needed. The employees then have to submit requests for reimbursements, which can take weeks to process before the employees receive their money back.
This can lead to employee resentment, and the workers may refuse to make purchases for the business in the future. Instead of businesses acting as if their employees are their personal banks, using virtual payment cards to make purchases in real time when they are needed can help to keep employees happier while also saving time and money.
When is it a good time to start looking at virtual procurement cards?
Business owners should ideally begin searching for virtual procurement cards soon after they begin their operations. Having sound internal controls in place from the beginning can help business owners to start and run their businesses with better financial control.
When businesses are searching for virtual cards, they might want to consider the cards from Bento for Business. Businesses are able to generate as many card numbers as they need and distribute them to their employees. They can set their desired controls on each card so that their employees are unable to abuse the cards but will be able to make purchases at the time that they are needed.
Applying for the cards takes less than a minute, and the approval decision is likewise fast. The cards can be used at merchants nationwide. To learn more about the benefits of virtual p-cards for your business, call 866.220.8455 today.