Benefits of P-Cards for Cardholders
P-cards are distributed by the employer to the designated employee for a variety of reasons, such as:
- Office managers purchasing office supplies
- Salespeople during events and conferences
- Fleet cards for fuel and repairs
- Travel and entertainment (T&E) expenses for employees and clients
Companies of many different sizes and in a wide variety of industries use p-cards because they offer significant value for both the employer and employees. Keep reading for five insights on why p-cards are a valuable addition to businesses.
Benefit #1: Lower Transaction Costs
While processing using the traditional procure-to-pay method, the transaction costs averaged between $50-$200 per transaction. Not only do these costs add up quickly when there are multiple transactions processed per week or month, oftentimes the single transaction costs can outweigh the actual cost of the purchased item.
For example, if the office manager needs to purchase a new keyboard or whiteboard markers for the office, it’s a relatively inexpensive purchase. Yet, the transaction fee can ultimately cost more than the actual item purchased. According to the NAPCP, using a P-card has a typical savings of $63 per transaction. Over numerous transaction processes each year, that is a tremendous amount of money saved just by simply using P-cards.
Benefit #2: Increased Cashflow
Using p-cards instead of traditional payment methods also streamlines the transactions process. The employee can make purchases directly from the supplier which not only improves internal processes, but also adds efficiencies to the transaction for the supplier. Why? Because they don’t need to wait for invoices to be completed. Instead, the payment is instantaneous and the supplier can quickly process and provide the purchase.
Benefit #3: Improved Day-to-Day Efficiencies
Since it doesn’t require forms to be completed, submitted, and then approved before a transaction can be made, p-cards shorten the time between needing the product, making the purchase, and receiving the item. This also saves the manual time employees spend completing these tasks which allocates more time back into their daily productivity. This increased capacity can lead to new efficiencies appearing. You might even find additional cost-saving opportunities in your merchant account.
Benefit #4: Easy Spending Management
A p-card enables the employer to predetermine a spending limit for each card to control how much the employee or department can spend. It safeguards the employer to ensure the card is not overused and instead stays within budget. Furthermore, the purchases for each card can be checked and reviewed by the employer so they are able to understand how the money is being spent.
Benefit #5: Easy to Track Purchases
In addition to regulating the spending amount for each p-card, you can further track spending by different departments. A purchasing card can be associated with each department in order to manage and collect all purchases through a single card. Furthermore, your company can use a different merchant category code for different departments to restrict unnecessary purchases.