How PCards Control Corporate Spending

What are Pcards?

Pcards, or purchase cards, or procurement cards, are a B2B payment method which leverages the existing credit card infrastructure and enables employees on behalf of a business to easily pay suppliers. While Pcards are an electronic payment method and can be used virtually, Pcards are commonly physical in nature. Another way to look at Pcards is they are type of corporate credit card.

Benefits of Pcards

These Pcards are commonly used to assist businesses with transactions of low cost. This is because the human capital resources used through the traditional purchase and approval request, and reimbursement processes are costlier to a business in comparison to using Pcards.

Another benefit of using Pcards are that they allow businesses to streamline payment processes and track expenses more efficiently. Which in turn, helps ensure employees are held accountable for purchases as Pcards provide insight into how the card was used.

Then when it comes to controls, Pcards can be limited by balance and they also limit unauthorized purchases such as restricting by a specific merchant category code. Moreover, Pcards must also be paid in full every billing cycle as credit can’t be rolled over into the next billing cycle.

Three Reasons to Consider Using Pcards

While many companies might still be getting onboard with the benefits of Pcards, there are a lot of good reasons to consider using them. Here are three of the best:

1. Security

Fraud can plague the world of B2B payments from both inside and outside of companies. This is because physical corporate credit cards can fall into the wrong hands. Charges can be made far beyond the point of an authorized transaction. And the ongoing COVID-19 pandemic seems to be making fraudsters ever more resourceful, with more than $42 billion in fraud losses for businesses in 2020, according to a survey by PricewaterhouseCoopers.

In an increasingly perilous corporate world, Pcards can provide peace of mind. There’s little to no danger should they fall into the wrong hands as cards can be restricted by amount, merchant categories, and also cancelled on-demand among other features.

2. Processing Costs Can Be Much Lower

While there are many benefits and uses cases for when it comes to invoices, these often fall for higher dollar value transactions. Pcards on the other hand also have a good use case, and that’s when it comes to lower dollar transactions or where purchases must be maid by credit card.

One of the axioms, arguably, of accounts payable is that invoices never just cost what’s on the bill. There’s pretty much always the hidden cost of processing, which can be $30 to $50 even for a single invoice, with one payment industry association noting, “Often, the process cost exceeds the value of the item being acquired.”

Multiply this out among the hundreds or thousands of invoices that many companies process each month and businesses can have a major cost drain on their hands.

Trying to find ways to save money with invoice processing or your invoice management processes? Enter Pcards. The same payment industry association noted that “typical savings resulting from P-Card usage are $63 per transaction.” For a company processing 500 invoices a month, that equals $31,500 in savings for that period, or $378,000 annually.

Of course there is a catch since not every company will pay invoices by card. But fear not if you’re paying invoices as Stampli’s AP Automation software helps improve efficiency, in addition to lowering invoice processing costs.

3. They’re Great for Spend Management

When it comes to managing spend, Pcards provide businesses the levers to control spend before it happens. While this depends on the Pcard structure, this puts accounts payable in control as Pcards can be tightly restricted or more open in nature if the business decides to do so.

These purchase cards can also help simplify the reconciliation process, in addition to providing an array of features from increasing spend visibility, tocapturing accounting information, and even helps you maintain your internal controls.This allows for businesses to run more efficiently, reduce card transaction costs, manage petty cash better, and track spend better.

Why Stampli Card for your Pcard Needs

While the term “Pcard” is ambiguous, and while Stampli Card wouldn’t technically be identified as a Pcard,Stampli Card is very similar in the fact that businesses have control over card spend, can set card limits, suppliers, usage types, and the balance has to be paid every cycle among other features. Here are some benefits:

• View Stampli Card transactions instantly with easy access to purchase details.
• Process Stampli Card transactions alongside invoices, and sync with your accounting system.
• No more chasing cardholders for receipts or documents as Stampli tracks cardholders down.
• Control Stampli Card usage with card limits, usage type, by cardholder, supplier, and more. 
• Suspend or even cancel Stampli Cards at any time.

Make smarter purchases and manage them expertly with the Stampli Card.