P-cards are distributed by the employer to the designated employee for a variety of reasons, such as P-Cards can be used by office managers to purchase office supplies or by salespeople when attending local events. They are widely used by different companies and industries because they offer significant value for the employer and the employees. Below are the benefits of using P-Cards for your business.
1. Lower Transaction Costs
When processing using the traditional procure-to-pay method, the transaction costs averaged between $50-$200 per transaction. Not only does this fee add up extremely quickly when there are multiple or even dozens of 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 is 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. And over numerous transaction processes each year, that is a tremendous amount of money saved just by simply using P-Cards.
2. Increase Cashflow
The process of using P-Cards as compared to traditional methods also streamlines the transactions process. The employee can make the purchase directly from the supplier which not only increases the internal process but improves the transaction for the supplier. They do not need to wait for invoices to be completed, instead, the payment is instantaneously completed and the supplier can quickly process and provide the purchase.
3. Day-to-day Efficiencies
Since it does not require forms to be completed, submitted, and then approved before a transaction can be made, it shortens 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.
4. Manage Spending
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.
5. 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.