Purchase cards, also known as purchasing, procurement, or p-cards, are commercial cards companies issue to employees for business expenses. These cards enable employees to spend company funds without going through a typical accounts payable process. Depending on the policy companies set, employees can purchase anything from cups of coffee to hotel rooms.
A p-card is a type of corporate payment card used by organisations to streamline the procurement process and facilitate business-related purchases.
Purchasing cards are typically issued to employees with authorised spending authority, enabling them to make purchases directly from vendors without the need for traditional purchase orders or reimbursement processes. They offer a convenient and efficient way to manage small and routine purchases, as well as track expenses, improve cash flow management, and enhance overall financial control for businesses.
These cards often come with predefined spending limits and detailed transaction reporting, making them a valuable tool for organisations seeking to simplify purchasing procedures and reduce administrative burdens.
On the surface, corporate credit cards may seem like an ideal solution for companies; employees will be familiar with the cards' functionality since they mirror a personal credit card. And, like purchasing cards, corporate credit cards enable employees to access corporate funds. However, the way companies keep track of cardholder spending, how spend is limited, and the distribution of control varies.
With the right procurement card, finance and accounting leaders can eliminate out-of-pocket expenses for employees throughout the entire payment process. Here are just a few of the recurring benefits companies experience when using purchase cards:
Below are a few examples of where purchase cards outshine when it comes to payments and expense management:
Just as every company is unique, so is every corporate card solution. When looking for a way to make internal processes easier for financial teams, consider these obstacles that procurement cards can help companies overcome:
If any of these issues spark a recurring conversation or complaint from finance teams, admins, and employees, a new business purchasing process may be in order. Purchasing cards offer an innovative and safe option for companies and are more robust when combined with the correct expense management software.
The most modern purchase card on the market should provide built-in adjustable controls capable of tying card transactions back to expense policies. That’s why the most efficient p-cards are attached to end-to-end solutions offering heightened security controls. An end-to-end spend management system features:
Throughout the approval process, procurement cards should ideally match a company’s purchasing policy against every expense. Charges within that policy approve automatically as set parameters create control for each card account.
Anything questionable receives a flag for manual approval. These automated approvals can still leave a clear audit trail while minimising back-and-forth communication. Finance teams are more likely to catch fraudulent transactions and stop unauthorised expenses before they happen.
Modern spend management solutions also should integrate with most accounting systems. When that integration occurs, data seamlessly syncs, reducing the workload for finance teams.
Automation also streamlines the time needed to close the books each month by eliminating double entries and keeping systems decluttered. Finance leaders can strategically make timely decisions with data-driven reports, given better spending visibility.
With p-card use, every employee has the opportunity to be a cardholder, by attaching the same purchasing card programme to virtual cards. It’s possible to generate single cards, cards for recurring expenses, or cards with precise expiration dates. These unique virtual cards offer greater security against fraudsters because the virtual credit card number is untraceable without access to a cardholder's identity or computer system.
Purchasing cards prevail as a necessity for a more secure and convenient payment vehicle to handle company expenses. However, these card systems will not add value to the spend management process if they aren't built to scale.
With Navan, companies can combine purchasing cards with an award-winning spend management solution that runs the entire spend ecosystem — eliminating manual processes and high transaction fees associated with other card providers.
Procurement cards tied to a spend management system like Navan enable companies to generate more ROI by reducing processing costs, preventing fraud, and providing insightful data that connects revenue to spend.
Navan solves the most prominent problem associated with using legacy corporate purchase cards by giving you control over your company's entire spend ecosystem. Want to find out more? Schedule a demo today.
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