Many organizations’ procurement departments rely on purchasing cards, commonly known as P-Cards, to purchase goods and services from vendors. Unlike other charge cards, P-Cards allow organizations to control employees’ (i.e. cardholders) spending by establishing presets for different cardholders. P-Cards yield many perks for organizations, such as fewer invoices and faster payments.
How do P-Cards Work?
P-Cards can be physical or nonphysical account numbers. Organizations set numerous controls, primarily monthly spending limits and single purchase limits, for each P-Card. What’s more, organizations may set restrictions based on a vendor’s merchant category code (MCC), which classifies a business by the types of goods and services it provides. For example, a trucking company can limit their employees’ P-Card transactions solely to gasoline stations in the United States.
Who are Issuers?
Issuers, also known as P-Card providers, partner with organizations to implement P-Card programs, issue cards and invoice transactions. Issuers employ card networks and processors to authorize transactions between cardholders and their vendors. After each month, issuers collate all of the organization’s transactions into a single invoice, which outlines each cardholder’s individual transactions, in addition to the grand total for the organization. Transactions must be paid in full to the P-Card issuer. Issuers include commercial banks and other financial institutions, such as JPMorgan Chase and American Express.
Click here to learn more about P-Cards and how they work.
Sign up to our newsletter
Lessons Learned from Three Major Procurement Blunders
When a procurement mistake occurs, it can be an opportunity to learn how to do things better next time. To proactively prevent future mistakes in your organization, learn and grow from others’ mistakes.
3 Procurement Success Stories to Inspire Your Business Strategy
Studying the success stories of other procurement departments can give you a fresh perspective or an encouraging story to show just how much is possible.
Amazon Business: Still Leading the Game with its B2B Purchasing Platform
Amazon’s B2B procurement platform launched in April 2015 and has become increasingly influential in the procurement space with new features and innovation. As you may expect, it doesn’t look like its growth will slow any time soon. Learn more about this tool and whether it might help you improve speed to market for your stakeholders.