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
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.
Reverse Auction: What It Is and Why Consider It
A major focus for procurement departments is cost savings and one way to do that is through reverse auctions. Find out what you need to know and how helpful reverse auctions can be to reach your cost cutting goals.
Outsourcing Tasks Could Benefit Procurement
There are dozens of procurement outsourcing groups out there just waiting to take on the not-so-fun tactical work…You may think it will cost too much to outsource or an outside resource won’t understand your business. In reality, many outsourcing companies are now equipped with DOsultants, not CONsultants…by nature the work should be completed more consistently and with higher quality.