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What is a purchasing card?

Learn how purchasing cards work and what benefits they provide your finance teams and employees.

Purchasing cards make business spending simple and help modern companies overcome a wide range of payment challenges.

About purchasing cards

Purchasing cards are company-assigned payment cards that employees use for business expenses and essential spending in their roles. They are designed to streamline the procurement process, compared to slower traditional purchasing processes.

Traditional corporate cards present numerous challenges for teams that need to spend frequently and spontaneously. Shared company card use makes it nearly impossible to track who made each transaction and what it was for. Corporate cards are also highly vulnerable to fraud and theft, making it difficult for finance to maintain control over spend. 

Purchasing cards are an efficient and secure alternative to traditional corporate cards. They enable teams to procure business-related products and services, without having to trudge through slow payment processes. Manual tasks like submitting purchase orders, paying out of pocket, collecting paper receipts, and applying for reimbursement are either automated or rendered unnecessary.

Purchasing cards come in different variations and are often also referred to as:

  • P-cards

  • Procurement cards

  • Corporate charge cards

  • Employee debit cards

  • Prepaid expense cards

  • Business cards

How do purchasing cards work?

Complex purchase requests and lengthy approval processes take a toll on employee productivity, which in turn hinders company growth. Purchasing cards enable employees to spend more flexibly and quickly, while allowing finance teams to maintain oversight and monitor all spend activity in real time. 

P-card providers offer businesses different card programs with specific features and benefits tailored to their needs. Companies of all sizes and sectors can benefit greatly from integrating purchasing cards into their business purchasing process.

Good p-card programs often include these features:

  • Every employee who needs to spend can get their own individual purchasing cards

  • Simple purchase approval processes and adjustable prepaid spending limits for every card

  • Customizable built-in spending rules that make company expense policies easy to follow

  • Virtual or physical MasterCard/Visa cards depending on individual spending needs

  • Tracked expenses so finance can review whomade each card payment and why it was made

  • Real-time spend data within a centralized spend management platform

  • P-cards can be paused, reactivated, and canceled with a click, without affecting other ongoing p-card transactions

P-cards vs traditional corporate cards

Shared corporate cards are easy to misplace, vulnerable to fraud, and hard to track. This causes major setbacks for teams that spend frequently and finance teams who need to closely monitor and control company spending. 

Purchasing cards give businesses better spend visibility with real time expense tracking, flexible control over spending limits, and customizable built-in card rules. P-cards also give businesses the option to use physical or virtual cards, or both. 

Virtual purchasing cards can be generated instantly, and are perfect for making secure payments online. Single-use virtual cards use a unique card number that is valid for a one time use, significantly reducing the risk of stolen card details. 

Recurring use cards support ongoing subscription payments, each with a credit card number that is valid for use with one specific vendor, budget, and pre-set amount of time. 

P-cards offer cardholders greater spend customization and possibilities compared to traditional corporate cards.

Key benefits of purchasing cards

Centralized platform and mobile app

Teams can order purchasing cards, set or adjust spending limits, review purchase details, and manage budgets – all from one central place. Business travelers can also use their p-cards and access spend features on-the-go with a connected mobile app. 

Flexible control

Manual purchase orders and traditional corporate cards rely on slow approval processes. Purchasing cards enable employees to request payments quickly and securely. Managers receive an automatic notification, and can approve or decline the request on the same platform.

Easy to create and use

Virtual cards can be generated instantly for quick and secure online purchases, and physical cards are easy to order for individual employees who are frequent spenders in their roles. P-cards are simple to manage; you can create, pause, switch ownership, or cancel them in a click. All without lengthy waiting times or disturbing other ongoing transactions.

Key benefits of p-cards for finance teams

Automated spend data

Less manual data entry makes bookkeeping a breeze. P-cards automatically track all purchase details and reconciles payments digitally in a central place. Accountants can close the books on time, with a fraction of the effort. Accounts payable can also be optimized with certain purchasing card programs.

Real-time tracking

Waiting for month-end account statements to sum up finances is risky. By the time you have a detailed summary of spend activity, teams may have already gone over budget. P-cards provide both a holistic and granular view over finances by tracking every p-card transaction and tagging its associated details, right as they come in.

Smarter Budgeting

Traditional purchasing processes and corporate cards hinder spend visibility. Good p-card programs make proactive spend management easy with customizable spending caps and monthly limits. Managers can even add restrictions on specific services and goods. With p-cards, finance teams can better distribute funds across departments, tailored to their needs and responsibilities.

Key benefits of p-cards for employees

Individual cards

Individually assigned procurement cards empower employees by giving them ownership and autonomy in their purchasing decisions, while also maintaining accountability. Finance can trust employees to make the best choices for the company, while keeping complete control over the total budgets. 

Perfect for business travel

At the office or on-the-go, purchasing cards enable employees to spend wherever and whenever necessary. Employees don't need to carry a plastic card on them for expenses, nor do they have to stress about losing the company card. MasterCard and Visa p-cards work for online and in-store purchases worldwide.

Safer online transactions 

Sharing credit card details on a post-it or by SMS is risky behavior, yet many teams take the risk when shopping online. Whether it's for e-commerce purchases or SaaS subscriptions, single-use and recurring virtual purchasing cards are stress-free solutions for safer online spending. Dynamic credit card information protects cardholders from hackers and fraud at the point of sale.

Get the spend control and visibility finance teams need.

Last update: August 24, 2021