When running your business, both you and your employees will often purchase products and services that the business needs. Traditionally, corporate credit cards have been the most popular way to do this and, despite several disadvantages to using these credit cards, most businesses still use them for business expenses.
However, times change, and technology advances, bringing with it new ways to manage your business’s expenses while still making your procurement processes more efficient. P Cards are one of these advances and are a better way to enable your employees to buy what they need.
In this post, we’ll look at P Cards, their features, and their benefits a bit closer.
The Traditional Option - Corporate Credit Cards
When considering payment methods for your business expenses, you might have given some thought to corporate credit cards. Like most other credit cards, these corporate cards allow you to make everyday purchases relating to your business.
As such, a corporate card allows you to buy equipment, office supplies, and other goods or services you need to run your business effectively. Another advantage of these cards is that, in many cases, you'll be able to earn cashback and rewards on your purchases. You can then redeem these rewards as discounts on future purchases.
However, corporate credit cards do have some drawbacks. For example, corporate credit cards are typically reserved for only senior employees or management. This means that any other employees need approval when they have to buy a product or service for the business. This results in procurement processes becoming slow and inefficient. In addition, because you’ll buy products on credit, you’ll have to pay interest on any balances due.
What are P Cards?
Considering the above, a P card might be a better option. But what is a P card? A P card or purchase card is an expense card that allows your employees to buy products or services on behalf of the company.
P Cards offer the following features:
- With P Cards you can determine custom spending limits on each card, either by way of a once-off spending amount, or a fixed amount per billing cycle that enables recurring purchases. You can also change these limits as your employees’ spending, needs, and requirements change.
- You can connect P Cards to a central platform that not only gives you easy access to all the card usage data but also enables easy changes to the cards and their limits.
- P Cards give you an easy way to document all business expenses and payments as you have access to a full transaction history of every card and many cards allow you to upload pictures of receipts. This makes managing your business expenses a lot easier.
- In many cases, you can also issue virtual cards to your employees. These cards have all the same features as physical cards but are a lot faster to issue. In many cases, virtual cards can also be dynamic meaning that the court detects changes constantly to protect you against fraudulent purchases.
What are the Benefits of P Cards?
Now that you've seen what P cards are, you might wonder why you should consider using P cards instead of a corporate card. In other words, what benefits do P cards offer? Well, there are several benefits and reasons why P Cards might be a better solution to manage your business’s spending while still enabling your employees to buy products and services when the need arises.
You can give every employee in your business their own card with its own limit. Typically, these limits will be based on the budget for a specific department and the department’s manager will control the budget by assigning a limit to every employee. Here, the manager will also be able to determine a once-off spending limit, a fixed limit for recurring purchases, and can even determine a limit based on the employee’s role. Ultimately, this gives you more control over your business’s finances.
As mentioned earlier, when using P Cards, you can give every employee their own card. This enables and empowers employees to make purchases on behalf of your business without needing to go through approval first.
Understandably, this makes your procurement processes more efficient. In addition, it also reduces the frustration of employees that don't have the tools they need to do their jobs effectively, but don't want to go to a manager or senior-level employee to ask for approval.
Automated Expense Reports
When every employee has a card, it’s a lot easier to track spending, allocate it to a specific department, and create expense reports. Conversely, with corporate credit cards, allocating expenses to a specific department or budget is challenging to say the least.
If you want to streamline your expense management and have better control over your business’s finances, P Cards are your best option. To learn more about P Cards, how they integrate with ControlHub’s procurement platform, and how our platform can help your business, visit our website for more details.