What is a P-card? Comparing P-cards and 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.

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During the early years of a business, you might manage employee expenses manually. They may pay for client entertainment, flights, and office expenses on a personal credit card that you later reimburse. 

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Now, fast-forward to when your growing small business has multiple teams and departments. Your finance leader may find themselves dealing with stacks of paper receipts to match transactions, unauthorized purchases, and time-consuming manual data entry. 

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To keep up with the high volume of card payments, you create more spending rules and spreadsheets. But that only creates more approval requests and manual work. Plus, everyone is confused about what counts as a business expense. 

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Your employees deserve P-cards or purchase cards to manage expenses more effectively. Ahead, you’ll learn why P-cards are better than corporate cards and how to choose a P-card provider. 

What is a P-card? 

P-cards, or purchase cards, are company cards that employees can use to make business purchases without going through the traditional purchase request and approval process. 

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Also known as procurement cards, p-cards allow your employees to spend company money when they need to. They’re an alternative to employees using their personal credit cards for business expenses and filing for reimbursement.

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Plus, purchase cards let you avoid long wait times between needing to make a purchase and getting it approved. 

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The best P-cards offer complete control by letting you limit spending categories and create daily, weekly, or even trip-long budgets. These features give you more visibility and control while cutting down on the time you spend tracking expenses, creating expense reports, and filing reimbursements. 

What can you use a P-card for? 

Employees can use P-cards for products and services they need to do their job. Common p-card use includes: 

• Office supplies, including stationery and electronics 
• Entertainment like client meeting or hospitality expenses
• Travel expenses like airfare, hotel bookings, and meals
• Software and subscriptions
• Small equipment purchases like home-office furnishings
• Training materials and professional development courses
• Vendor services like printing and catering for office events
• Emergency purchases, such as minor repairs or last-minute supplies

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Organizations other than businesses often use P-cards to let their members make purchases without using personal cards. For instance, many universities give students P-cards for tax-exempt school-related purchases. Similarly, government agencies use P-cards to simplify buying goods and services for their operations. 

What are the benefits of a purchasing card?

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The right purchase cards streamline procurement, empower employees to make necessary purchases, reduce unnecessary spending, and simplify financial reporting. 

Simplified expense management 

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Sometimes, employees need to spend company money on travel or business expenses. Using outdated methods like written purchase requests and manual expense tracking creates unnecessary complications.

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The best P-cards simplify the process by letting you set vendor restrictions. For example, you can set a monthly hardware limit and allow purchases only at specific hardware stores. That way, you eliminate the need for prior written approval and manual reimbursement processes since employees use the company’s P-card.

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

Better spending control 

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Traditional corporate credit cards can lead to issues like:

• ‍Zombie spend: Recurring charges for unused services, like forgotten online subscriptions.‍
• Frivolous purchases: Without merchant restrictions and spend limits, it's hard to distinguish necessary expenses from unnecessary ones, and it's difficult to track who made these purchases.

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Corporate purchase cards (P-cards) address these problems by offering better control over spending. With a P-card, you can set vendor restrictions and spend limits, eliminating faulty purchasing processes and unrestricted spending. They provide clear visibility into employee spending with detailed reports for full transparency.

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P-cards are a huge advantage over traditional B2B payment methods like ACH, checks, and wire transfers, which offer little control over how and where employees spend company money.

Increased efficiency 

As a finance manager, you and your colleagues might spend too much time each month paying bills, reviewing manual purchase reports, and tracking down receipts. These tasks waste valuable hours.

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P-cards streamline the accounting and bill payment process. When an employee uses a company purchase card, it automatically updates your company's records with all details, including receipts and invoices.

Improved compliance

P-cards allow you to set strict spending limits and vendor restrictions so that purchases align with company policies. Detailed transaction reports make it easy to monitor spending and catch any policy violations early. With P-cards, you can ensure all expenses are compliant with your company's standards, reducing the risk of fraud and errors.

What’s the difference between a corporate card and a p-card?

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P-cards and corporate credit cards may look the same. But, there are a few key differences between the p-cards and traditional corporate credit cards.

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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. 

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Traditional corporate credit cards have fewer restrictions you can place. Our quick comparison table breaks down the key differences:

What’s the difference between a business credit card and a P-card? 

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P-cards and business credit cards have different use cases and functionality. While P-cards are usually assigned to employees and have custom spending controls, business owners use business credit cards to finance their expenses.

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How to choose a P-card provider: top features to look for  

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The best P-card providers simplify your job as a finance leader and let you focus on more high-value tasks. 

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Make sure your P-card provider has these six features before you sign up: 

Unlimited physical and virtual cards

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‍Some P-card issuers have a limited number of cards available per company. When you go over that limit, you’ll have to pay fees on each additional individual 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.

Clear spend limits 

Unlike traditional corporate cards, the best P-cards allow you 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 fill out purchase or reimbursement requests.

Visibility into transactions

Your purchasing card program needs to give you real-time visibility into your spending as it happens. When you have a clear picture of all your expense transaction data, ensure compliance and prevent unauthorized purchases. Detailed transaction reports provide insights into spending patterns, helping you make informed financial decisions and keep your budget on track.

Block and approve purchases from specific vendors 

Look for P-cards that ensure employees only spend company money at approved vendors. Unlike older corporate credit cards, Ramp P-cards let you control this. You can specify which vendors are allowed and block unapproved ones.

Integrate with your accounting software 

Manually transferring spending records to accounting software like Xero, Sage Intacct, and QuickBooks is time-consuming and tedious. Your chosen P-card program and expense management software need to integrate with top accounting software.

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Companies like WayUp use Ramp’s features to save over 80 hours of work each month, cutting operational costs and boosting efficiency.

Automatic receipt matching 

One major pain point in traditional procurement is matching receipts. Businesses need paper receipts for taxes, but manually matching them to P-card card transactions is tedious and time-consuming.

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Look for p-cards linked to expense management software that has automatic receipt matching. For example, when employees use their Ramp P-cards, they simply snap a picture of their receipt with their smartphone. Ramp then categorizes the purchase, attaches the receipt, and updates your records. Automating the process can help you close your books up to 88% faster, as it did for Marqeta.

Choose the right P-card for your business

Procurement cards should do more than just let your employees spend company expenses. You need an all-in-one expense management solution that helps your finance team streamline processes. Your P-card should also help employees follow expense policies and eliminate the need for manual data entry. 

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That’s where Ramp comes in: 

• Automated receipt matching: Employees submit receipts via mobile app the moment they make a purchase. Ramp matches those receipts to your expense reports for seamless accounting.
• Reduce out of policy spend: Add restrictions to automatically prevent specific categories and merchants. 
• Eliminate manual expense reports: Easily submit expenses through SMS, mobile app, and integrations.
• Physical and digital corporate cards: Both cards integrate seamlessly with Ramp’s expense management system. Physical cards are for in-person transactions, while virtual cards are ideal for online purchases and subscriptions.
• Simplify approvals: Create customizable workflows that only notify the right people, based on spend amount or team role, and keep visibility high.