A p-card is defined as a type of business charge card that can be given to select employees so that they can make authorized purchases and payments for their companies. P-cards can help businesses to save substantial costs per transaction and can help to prevent fraud.
According to a benchmark study by J.P. Morgan, the average transaction cost for a traditional purchasing program is $92.49 per transaction. When p-cards are used instead, the average transaction cost is $21.91, netting a 76 percent savings for companies.
Businesses use p-cards to help to control spending and to reduce costs. Business owners are able to restrict the p-cards to be used for purchases from preferred merchants, and they can set spending limits by the day or week.
P-card reconciliation is much simpler than reconciling cash, credit card, and check payments. This is because the data automatically imports into your accounting software so that you can see your balances and how your money is being spent at any time.
If you are wondering what is a p-card and how it compares with a procurement card, it is helpful to understand how the cards work. A p-card and a procurement card are the same things. The cards are given by businesses to a specific group of individual employees, and the employees can use the cards to make purchases for the companies.
Purchasing cards can be restricted according to what they can be used to purchase, how much can be spent, and where they can be used. You can also turn the p-cards on or off remotely. Your employees will not have to submit requisition forms and wait for the purchases to be approved to make purchases, helping to streamline the payments process at your company. P-card reconciliations are straightforward since the information uploads into your accounting program at the time the payments are made.
Using purchasing cards at your company can help you to prevent your employees from making unauthorized purchases. You can restrict the cards to be used at specific merchants and set the spending limits on the cards by the interval you want.
The meaning of p-cards is simple and how they work is simple. If an employee attempts to make an unauthorized purchase at another store, the transaction will be denied at the point of sale. You will be able to see the attempt from your online dashboard and can handle any misuse as you see fit.
In a traditional payment and purchasing process, employees have to submit requisition forms to seek approval for every individual purchase regardless of its amount. After the forms are submitted, they must then be processed by the accounts payable department for approval.
Once an individual purchase is approved, the AP department will issue a purchase order. The employee will then get an invoice from the vendor, and the invoice will be processed. Finally, a check will be issued to complete the purchase. This process costs a significant amount in terms of time and labor costs. With purchasing cards, your company can save money on every transaction by avoiding the traditional process.
A p-card differs from a corporate card in several ways. Corporate cards are company credit cards that may be given to employees to make purchases. When employees have corporate cards to use, they may use them anywhere, and the purchases that they make are charged back to the company’s revolving credit line.
Corporate card purchases add to the company’s debt, and employees may make unauthorized purchases with them. P-cards do not incur interest, and the purchases that can be made with them can be restricted. This makes purchasing cards a safer option for companies.
There are some differences between procurement cards and ghost cards. Ghost cards are generally used by larger companies and can be used vertically or horizontally. The companies can generate virtual credit card numbers and CVVs and assign them to each department. All of the employees in each department can make remote purchases by charging them to the ghost card numbers.
Procurement cards can be given to a specific group of individual employees who have received p-card training about the company’s p-card policies. The cards may be plastic or virtual, and the individual employees can use them to make authorized purchases for the company over a specific period of time.
A business could give a p-card to an employee who has to travel frequently a card that is restricted to purchasing gas from a specific gas station chain. The business can set the spending limit on the card to $50 per day or whatever amount the employee might be expected to spend.
The employee can then use the card to fill up with gas at the specific gas stations that the employer has chosen. If the employee tries to use the card to buy lunch at a restaurant, the charge will be declined. The cards can be turned off remotely so that they will not work when the employees are not working and can be turned on again when they are needed.
There are several features that businesses should look for when they are trying to find the best procurement cards. Procurement cards should not have high annual fees or charge any interest.
The best cards should allow you to restrict where each employee is able to make purchases according to his or her job duties. You should also be able to set daily or weekly spending limits and to turn cards off and on remotely at any time.
You can find p-cards from card issuers that specialize in offering business credit and debit card solutions. To find the best procurement cards, you should read reviews from other business customers of the experiences that they have had.
You should read the fine print of each offer that you find so that you can compare the costs of the cards and their features. Choosing cards from companies that have enjoyed substantial investments in fundraising rounds may help you to find offers that might work the best for your company.
Bento for Business offers business Visa debit cards as well as procurement cards for companies that help to streamline the payments process and the p-card reconciliations for businesses. You can control when, where, and how the cards can be used.
For example, if you own a clothing boutique, you can give a procurement card to your inventory manager that is restricted to clothing purchases from your wholesaler. You can set a weekly limit of $2,000 on the card. Your inventory manager can reorder new merchandise to stock your store when she needs to do so.
Bento for Business was established by finance professionals to benefit businesses. The company offers a variety of business debit card solutions, including procurement cards. After instituting p-card policies and a good p-card training program, you can order up to 10 cards for $29 per month. The first two cards that you order each year are free.
You do not have to undergo a credit check for approval because the cards are not credit cards. You are able to set the controls that you want to restrict the spending that can occur. Bento offers a free 60-day trial so that you can try out the cards at your company before you make a decision. To learn more, call 866.220.8455.
Applying does NOT affect your credit score!*This is not a credit card.
Banking services provided by The Bancorp Bank, Member FDIC. This Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A Inc. and may be used everywhere Visa® debit cards are accepted.