Have You Ever Heard About Purchasing Card (P-Card)?

What Is A Purchasing Card (P-Card)

A Purchasing Card (P-Card) is a form of company charge card that allows goods and services to be procured without using a traditional purchasing process. P-Cards, also known as procurement cards or purchasing cards, are used by employees to charge goods and services on behalf of their company. They offer several advantages, including:

• Efficiency: P-Cards provide a faster and more convenient way to make purchases, reducing the time spent on filling out requests and approvals.
• Cost savings: According to the National Association of Purchasing Card Professionals, the average savings per transaction made with a P-Card is $63.
• Control: P-Cards offer a high level of control, allowing companies to manage budgets and get accurate spending information.
• Security: P-Cards are secure and can be used in 99% of stores worldwide, providing an extra layer of security for employees who don’t want to make purchases using their personal cards.

The typical procurement process using a P-Card works like this:

1. The finance team or department manager sets the P-Card policy controls for individual employees.
2. If a transaction amount is less than the designated spending limits, the P-Card payment is automatically approved. If it exceeds the spending limit, the employee makes a request on the system, detailing their planned purchase and associated transaction costs.
3. A notification is instantly sent to the manager, who can approve, change, or deny the request.
4. Upon approval, the amount is transferred to the employee automatically to spend on their intended purchase.
5. The employee then uploads their receipt to the app, enabling the finance team to begin the reconciling process and documentation around business expenses.

P-Cards can be used in various ways, such as for high-volume transactions, replacing checks, and making payments to suppliers. However, they also have some disadvantages, including the potential for maverick spending and the need for supplier enablement.

How To Apply For A Purchasing Card (P-Card)

1. To apply for a Purchasing Card (P-Card), the typical process involves the following steps:
2. Read and understand the organization’s P-Card policy.
3. Complete the required online P-Card training.
4. Fill out a P-Card application form.
5. Obtain the signature of a supervisor on the application form.
6. Submit the completed application form to the appropriate P-Card administrator.
7. After the application is submitted, the P-Card will be issued, and the cardholder will receive it within a specified timeframe, usually around 7-10 business days.

It’s important to note that the eligibility to apply for a P-Card is governed by the organization’s Purchasing Card policy. Typically, employees, affiliated hospital employees, and certain students may be eligible to apply for a P-Card, subject to the necessary approvals.

The P-Card, also known as a procurement card or purchasing card, is a physical payment mechanism used to transfer money from a business to suppliers. It works like a credit or debit card and offers a high level of control, allowing companies to manage budgets and obtain accurate spending information.

If you are considering P-Card payments for your organization, it’s essential to understand the associated policies, training requirements, and the application process to ensure a smooth and efficient procurement experience.