P-Cards versus Credit Cards
What is a p-card?
A p-card is a type of business charge card that companies can distribute to specific employees. The employees can use the cards to make purchases on behalf of their employers without having to spend their own money or to wait for purchase approvals.
The National Association of Purchasing Card Professionals reports that the average process costs of traditional processes range from $50 to $100 for every transaction. When purchasing cards are implemented instead, businesses can save up to 80 percent per transaction.
What is a business credit card?
A business credit card is a type of credit card that is issued to businesses instead of consumers. Businesses can give their employees business credit cards to use to make purchases on behalf of the companies. However, the purchases that are made add to the businesses’ debt and may incur interest.
Businesses must also credit-qualify before they can be approved for business credit cards. When you compare credit cards top-cards, it is important to pay attention to annual fees and interest rates. When comparing p-cards vs credit cards, several differences stand out that might make choosing purchasing cards a better option for businesses.
P-cards vs credit cards
Comparing p-cards vs credit cards reveals several differences between credit cards and p-cards. Credit cards may incur interest charges if the balances are not paid in full each month. P-cards do not allow balances to be carried from month to month so no interest is charged.
Comparing p-cards vs credit cards also demonstrates that businesses can exercise greater controls over purchases that are made with the pcards. The ability to set expense controls on p-cards is one of the important differences between credit cards and p-cards.
Differences between business credit and business debit cards
Just like comparing p-cards vs credit cards can demonstrate important differences between credit cards and p-cards, comparing business credit cards and business debit cards can also be important. Business debit cards are linked to a company’s deposit accounts and will not incur interest or add to the business’s debt.
When payments are made using debit cards, the purchase costs are subtracted from the business’s own money. This makes the purchases easier to track and adds to their transparency.
There are several advantages of implementing a p-card program at your company. A p-card program allows you to get rid of reimbursements, check writing, and traditional purchase approval processes. This can help to streamline your AP processes and to prevent unauthorized transactions.
When your employees make p-card payments with their cards, the p-card payments that are made can be tracked by each employee. You can log into your dashboard at any time to review the balances on each of the cards and the p-card payments that have been made. This can allow you to spot misuse early and to understand how your money is being spent by each employee that has been issued a card.
What is a p-card program?
Purchasing card software is a type of program that can be used to generate procurement cards when they are needed. You can generate the cards that you need instantly and distribute them to your employees. Purchasing cards can be virtual cards or plastic cards.
When you generate virtual procurement cards, your employees can use them to make remote purchases over the internet or phone. Plastic procurement cards can be used to make in-person purchases at the merchant locations that you designate.
Understanding the p-card process
When you compare credit cards top-cards to procurement cards, the advantages of the p-card process are clear. Procurement card numbers can be generated and given to the employees of your choosing. You can set restrictions on each card according to the individual job duties of your employees.
The employees can make purchases from your chosen vendors, and the purchase costs are subtracted from the balances that you have established on each card. The transaction information is then automatically imported into your software so that it will not have to be manually entered.
P-card policies and best practices
The best practices for purchasing cards at your company include starting out with a strong purchasing card policy. You should train all of the employees who will be given the cards about their allowed uses and the types of purchases that are unauthorized.
You should set spending controls on each card that you distribute. You can set individual spending limits by the day or week and restrict where the cards can be used. You should complete p-card reconciliations on a regular basis to make certain that your employees are adhering to the policies and procedures that you have established.
Top p-card features and what to avoid
There are several features that you should look for and others that you should avoid when you are searching for procurement cards. The best procurement cards should be affordable and should not charge interest or high annual fees.
You should have the ability to place restrictions on the cards, including restricting the use of individual cards to purchases from specific vendors, setting spending limits on each card, and turning the cards on or off from your mobile device instantly.
Where to find a p-card
Procurement cards are offered by card issuers and banks as a solution for business payments processes. To find the best card for your needs, you should research different offers online.
You can read virtual card and procurement card articles to get an idea of the features that you should look for. You can also read reviews of different companies that offer business procurement cards. When you have narrowed down your list, you should compare the costs and features of each company’s cards so that you can make a better-informed decision.
How Bento for Business’s controls can help to enforce your p-card policies
Bento for Business offers business Visa debit cards and procurement cards that come with extensive controls. You are able to control where your employees can use the cards that you give to them. You can set daily or weekly spending limits and choose how much money to make available on each card. You can also turn the cards off when your employees are not working or between needed purchases.
For example, if you own a bakery, you can give the chief baker a procurement card that he can use to purchase flour, sugar, and other staples that you need to make the cakes and cookies that you sell. The card can have a spending limit for p-card payments of $50 per day, and you can turn it off when your baker gets off from work each day. The p-card reconciliation process can be automated so that you know what money is available at any time.
Why Bento for Business is the top choice
Bento for Business is focused on helping businesses gain better control of their expenses with its procurement cards and business debit cards. Bento has multiple packages that are available. You can get two cards for free each year, and you can order up to 10 cards for $29 per month.
The cards are not credit cards so that you will not have to undergo a credit check. Bento has a 60-day free trial so that businesses can try the cards out before they decide whether to keep them. To learn more, call 866.220.8455.