What is a p-card (purchase card)? P-cards vs. traditional business credit cards

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Also known as procurement cards, p-cards allow your employees to spend company money when they need to. The best p-cards offer complete control by allowing you to limit spending categories and create daily, weekly, or even trip-long limits. These features give you more visibility and control while cutting down on the time you spend tracking expenses, creating expense reports, and balancing your books.

What are p-cards used for?

P-cards can be used to make a wide variety of purchases, including:

• Office supplies like stationery and electronics
• Professional development courses or training materials
• Business travel expenses including airfare, hotel bookings, and meals
• Specific equipment or tools for projects
• Client meeting or hospitality expenses
• Vendor services like printing and catering for office events
• Emergency purchases such as minor repairs or last-minute supplies

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P-cards are also used in other organizations where members may need to make purchases under the organization instead of using their personal cards. For example, many universities assign p-cards so that students can make specific school-related purchases that are exempt from sales tax. Similarly, government agencies use government p-cards to simplify the process of buying goods and services for government operations.

Is a p-card a debit card?

While debit cards directly deduct funds from a linked checking account, p-cards work more similarly to charge cards used in business settings. P-cards charge transactions to the organization, which then pays the card provider on a monthly basis. This system allows for smoother purchasing procedures, better expense monitoring, and greater control over spending, unlike the instant withdrawal characteristic of debit cards.

P-cards vs. corporate credit cards

At first glance, p-cards and corporate credit cards may look one and the same. But upon closer inspection, there are a few key differences between the best p-cards and traditional corporate credit cards that you should consider before you choose one over the other.

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Key differences include:

• Primary purpose: P-cards are designed to help improve your procurement process, saving you time and money by imposing restrictions on how and where employees can spend corporate money. Meanwhile, traditional corporate credit cards have fewer restrictions you can place.
• Budget limits: Usually, you’ll set up spend limits on p-cards, limiting employee spending as you purchase new equipment and software, or cover travel expenses. Traditional corporate credit cards typically come with limited to no spending controls.
• Reporting capabilities: Well-designed p-cards make it easy to track your expenses automatically. They’ll also produce monthly reports for finance teams to review and limit expenditures for cardholders. ‍
• Integrations: Some modern p-cards, like Ramp, offer integration with popular accounting and bookkeeping software including QuickBooks, NetSuite, and Xero. Traditional corporate credit cards typically have limited integrations, which means you’ll have to manually validate and account for each individual transaction.

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P-cards vs. business credit cards

P-cards and business credit cards have different use cases and functionality. The former are designed to be assigned to employees and have custom spending controls, while the latter are usually used by business owners to finance their expenses.

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Here are some of the main differences between p-cards and business credit cards:

• Usage scope: P-cards are specifically designed for employees to pay for operational expenses and specific vendor types, whereas business credit cards are used for a wide range of general expenses.

• Rewards and benefits: Business credit cards typically offer rewards programs like cashback and travel points, while p-cards may not offer rewards. However, some purchasing cards, like corporate cards, do come with rewards programs.

• Employee access: P-cards are distributed on a limited basis among employees in certain positions in a company, while business credit cards are usually used by business owners or given to all members of a smaller company.
• Credit impact: Business credit cards directly impact a company's credit rating. P-cards, which are usually settled quickly, have a different or lesser impact on credit.

Benefits of corporate purchase cards

Modern corporate purchase cards should help you simplify the procurement process, give your employees the power to make the purchases they need while reducing unnecessary spending, and simplify your financial reporting and accounting.

Corporate purchase cards empower employees and lead to smarter spending

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Now and then, your employees will need to spend company money on travel or business expenses. If you’re using the old system of written purchase requests, manual expense report tracking, receipt matching, and reimbursements, this can be quite a headache.

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The best p-cards simplify this process by allowing you to set up vendor restrictions for your employees. For instance, you can set a monthly hardware limit and only allow your employees to shop at specific hardware stores. That way, there’s no need for prior written approval, and since your employees use your company’s p-card, the reimbursement process is completely eliminated.

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Some p-cards, including Ramp, also offer automatic receipt matching. Employees simply take a picture of their receipts, and Ramp will categorize their spending, matching their receipts to their purchases.

P-cards offer safe and controlled spending

The limited controls corporate credit cards offer can lead to some problems, like:

• Zombie spend: Zombie spend refers to recurring transactions for services you don’t use and likely forgot about—like online subscription services.
• Frivolous purchases: Without vendor restrictions and spend limits in place, you’re left to sort out which employee purchases are necessary or frivolous. Traditional corporate cards make it difficult to catch these transactions or determine who’s making them.

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Corporate purchase cards help you save money by solving these problems. With a p-card, you don’t have to worry about faulty or nonexistent purchasing processes, unrestricted spend, or low visibility around employee spending. A good p-card gives you complete control over how and where your employees spend corporate dollars and provides you with detailed reports for complete transparency.

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For these reasons, p-cards offer a huge advantage over traditional B2B payment options like ACH, checks, and wire transfers, which offer little to no control over where or how much your employees spend corporate money.

Use a corporate p-card to save time paying bills

As a business owner, you or your employees may be spending a lot of time each month paying bills,reviewing manual purchase reports, and fishing for purchase order receipts. These mundane tasks cost hours of wasted productivity that could be better spent elsewhere.

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P-cards can help your business streamline the accounting and bill payment process. Every time your employee swipes your company’s purchase card, it updates your company’s books with all relevant details, including receipts and invoices. Not only does this make your employees’ lives easier, but these automated tools also cut operating costs and increase efficiency.

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How to choose a p-card provider

‍There are several corporate purchase card providers on the market, each with their own unique features, benefits, and fee structures.

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That’s why it’s important to do your research and compare your options. In particular, look for p-card providers that allow you to do the following in order to improve your financial operations and spend management:

Provide cards to all employees

‍Some p-card providers have a limited number of cards available per company. When you go over that limit, you’ll have to pay fees on each additional card. At Ramp, we offer an unlimited number of physical and virtual cards so that you can easily set individual restrictions and track exactly who is spending what and where.

Set clear spend limits

Unlike traditional corporate cards, the best p-cards offer the ability to set clear spending limits for specific purchases or time frames. That way, your employees know exactly how much they can spend, and they don’t have to go through the hassle of filling out purchase or reimbursement requests.

Block and approve purchases from certain vendors

‍As a business owner, you’ll want to make sure your employees don’t spend company money on unapproved vendors. Although there’s no way to control this type of spending with older corporate credit cards, corporate p-cards like Ramp let you specify which vendors you want your employees to have access to while blocking others.

Ramp: combining the controls of a purchase card with the convenience of a corporate card 

‍Ramp’s corporate cards offer automated expense management tools that streamline expense tracking and reporting processes.

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Ramp takes advantage of the Visa network, meaning you and your employees can use your p-card anywhere Visa is accepted. We provide a lineup of powerful features like vendor controls, spend limits, and accounting integrations so you can simplify your company’s finances.

Built-in spend management

We let you assign unlimited cards to employees, each with their own card number for tracking purchases, adding spending limits, and managing vendor access. When your employees use their cards, Ramp automatically categorizes and tracks the transactions—we even match submitted receipts to the correct card transactions.

Time-saving accounting integrations

Manually moving spending records from card accounts to accounting software like Xero, Sage Intacct, and QuickBooks takes a lot of time and energy for businesses. At Ramp, we partner directly with these tools to give you that time back.

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Ramp integrates with the leading corporate accounting software solutions to automate your expense management. Companies like WayUp use Ramp’s integration and automated accounting features to save more than 80 hours of work per month—that’s an operational cost savings of more than two weeks of full-time employment.

Real-time reporting

Most corporate purchase cards offer monthly reporting, but it’s more useful to view transactions immediately. Like business credit cards, Ramp allows you to see your company’s transactions in real-time.

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And, unlike traditional corporate credit card reporting, Ramp provides full transparency about who’s spending how much money and with what vendors.

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Even the best employees will forget to submit expense reports from time to time. Because Ramp’s reporting updates in real-time, you’ll never spend time searching through emails and reaching out to employees for more information about what they’ve spent.

Digitized receipt matching

One major pain point in traditional procurement strategies is receipt matching. Your business will need its paper receipts for tax purposes, but the process of manually matching receipts to card transactions is painstaking and time-wasting.

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Ramp’s automation eliminates this hours-long manual process and replaces it with automatic receipt matching.

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When your employees use their p-cards, all they need to do is snap a picture of their receipt with their smartphone. From there, Ramp categorizes the purchase, attaches the receipt, and keeps your books in order, letting you close your books up to 88% faster, as was the case for Marqeta.