P card applicationCorporate Cards
What is a p card?
A p-card is a purchasing card an employee uses on behalf of a business. Purchasing cards can be used to make authorized purchases and payments for the company. These cards are generated by businesses with a p card program. The cards are not credit cards and do not allow businesses to carry over balances each month.
Instead, the purchases are either subtracted from the business’s account balance or must be paid in full by the end of the month. To get a p-card, the business needs to fill out a p card application.
The use of p-cards continues to grow. P-card use for B2B payments has grown at a compound annual growth rate of 9 percent over the last five years. During the same period, corporate card use grew at a rate of 3 percent.
P-cards, also known as procurement cards, are popular because they allow businesses to control their expenses. The cards also can be used in place of outdated payment systems so that companies can save time and money on the transaction costs that are involved with traditional procure to pay methods.
How do p cards work?
Procurement cards can be generated with a p card application. Businesses can set the relevant expense controls that they need on each card and distribute them to employees who have to make purchases for the company. P-cards solve several problems.
In traditional systems, the transaction costs of the procure to pay system are the same regardless of the value of the good or service that is being purchased. Employees have to complete requisition forms that then take time to process. The forms must be approved, and a purchase order will be generated. Then, the supplier will create an invoice for the item, and the invoice must be processed. Finally, a check will be issued to pay for the item.
Procurement cards avoid all of these steps. When they are used to purchase high-volume, low-dollar items for the business, they can help to save substantial costs that would otherwise be involved with the purchases.
Who uses p cards?
Businesses of all sizes use p cards because of their ability to streamline the payments process, save money, and to control expenses. Unlike business credit cards, p-cards do not charge purchases to a line of credit and so do not incur interest or add to the debt.
P-cards offer more extensive expense management features and controls. They can also be used to replace systems such as reimbursements, ACH transfers, petty cash, and checks. P-cards are much safer than these payment alternatives and provide greater transparency into your business expenses.
How do you get a p card?
To get a p-card, you have to fill out a p card application. Since the card is not a credit card, the p card application is not used to check your credit or that of your business. Instead, the p card application will want to know information about your company to make certain that you are a business.
P-cards are offered by a number of banks and card issuers that specialize in the needs of commercial customers. You can review offers online until you identify some p card programs that offer the types of features that you are searching for. You can then fill out the p card application and order the number of cards that you need. You can also simply generate p-cards from an application or with an API.
How long does an employee get to use their p card before they need to fill out a p card renewal application?
The length of time that an employee will be able to use a p-card before they need to fill out a p card renewal application will be up to you. You can establish the duration that each card will work. Once the time period is up, the card will expire.
An employee who needs to use the p-card again can request a renewal p card application form. He or she can fill out the renewal p card application form and submit it to you. You can then decide whether to turn the p-card back on for the employee.
What is a p card program?
P card programs are programs within your company that are used to implement p-cards for payments and purchases. Before you simply order a bunch of p-cards and distribute them to your employees, it is first important for you to establish p card programs.
P-cards work best when they replace existing payment systems rather than being layered on top of them. You will want to do some research to determine different types of cost savings and implementation strategies. You might begin with a pilot phase before you fully adopt the p-cards within your company.
What are the best p card policies?
It is important that your company has a clearly written p card policy in place before you distribute p-cards to your employees. A good p card policy should list the types of purchases that are authorized as well as those that are not.
Your p card policy should also include information about the expense controls that you are implementing on the cards. You should distribute your policy to every employee that will be given a p-card.
Importance of p-card training
In addition to a strong program and sound policy, it is crucial for you to have a good p-card training. The training can include such things as how to use the cards, what your expectations are, and how to fill out a p card application.
You might also explain the signs of fraud so that your employees understand how to identify and report it. A good training session can help to protect you from employee mistakes with their cards. When employees are properly trained, unauthorized purchases will decrease.
Is a p card application anything like a commercial card application?
A p card application differs from a commercial card application in a couple of important ways. A p card application is primarily concerned with proving that you are a business and is not a credit application.
When you apply for a commercial card, the card issuer will complete a credit check of your business. If your company does not have a sufficient credit history, your credit might also be checked. Many card issuers require that business owners submit to credit checks and personally guarantee their commercial credit cards, which can impact your credit.
How does a procurement card compare to a business debit card?
When you fill out a p card application for a procurement card, you will be applying for a card that has similarities to a business debit card. Neither card is a credit card and will not require a credit check. Some p-cards act like business charge cards, meaning that you have to pay your balances in full at the end of the month.
Business debit cards subtract the purchases that are made directly from your account balance. The transactions are taken out of your balance immediately so that you can see them in real time. Like p-cards, business debit cards offer extensive controls so that you can keep a handle on your business expenses.
What are the benefits of a business debit card?
A business debit card is a secure way to pay for purchases and can help to prevent unauthorized transactions. Debit cards for businesses allow you to set controls on each card before you hand them out to your employees.
With business debit cards, you can also see everything that has been spent in real time. You can sign into your dashboard and review all of the transactions that your employees have completed by clicking on their individual cards. You can also view the balances and decide when or if to add more money to each card.
Spending controls offered by modern software
Modern software allows business owners to set unique spending controls on their business debit cards. You can set different controls on different cards, according to the jobs of different workers.
For example, if you have an employee who drives for your company, you can restrict her card by purchase category to gasoline-only purchases. You can decide how much money to place on her card.
You might allocate a total of $400 to her card for gasoline for a month and set the daily spending limit at $25. You can also limit her card to be used to buy gas from a specific list of gasoline stations, and you can choose the times when the card will work.
Real-time expense monitoring and tracking
Some business debit cards allow you to engage in real-time expense monitoring and tracking. The purchases are instantly subtracted from your account balance, so you can log in and see how much has been spent by an employee at any time.
The cards can be set to automatically upload data about transactions as they occur. Your employees can be trained to photograph and submit receipts electronically. Using cards makes it easier for your employees to comply with your company’s expense management policy, and you can end petty cash systems and checks.
Why a business debit card is sometimes the better choice
If you are trying to decide whether you should complete a p card application or apply for a business debit card, both can offer benefits. However, a business debit card can sometimes be the better option because of the combination of expense controls and the ability to track expenses as they occur.
Business debit cards can also be turned on or off with an application on your mobile phone, computer, or tablet. If you log in and see that a card has been misused, you can turn it off without having to worry about trying to recover the card.
Learn more about the benefits of business debit cards
The Bento for Business Visa debit cards offer a robust menu of expense management controls. Businesses are able to set restrictions that are in line with their expense policies and budgets.