A PCard, or purchasing card, is a form of company charge card that allows goods and services to be procured without using a traditional purchasing process. It is a type of commercial card that is linked to the companys account, and the purchases are subtracted from the account. P-cards are designed to help improve the procurement process, saving time by empowering employees and saving money by imposing strict rules and restrictions on how employees can spend corporate money. They are similar to consumer credit cards, but with more restrictions and limitations.
PCards can be used to streamline the accounts payable process, assist with vendor management, and weed out zombie spend. They are becoming increasingly popular, with PCard spend increasing from $80 billion in 2003 to $110 billion in 2005. By 2008, over 70% of all organizations were expected to have a PCard program, up from 60% in 2005.
If a company plans to start using Pcards, it is important to understand the best practices for their use. A clear expense policy should be implemented that outlines expectations for purchases made with the Pcards, and training sessions should be conducted with employees about their cards. Pcards can help overcome issues such as an over-reliance on expense reports, which waste time and effort for the whole company and aren’t fair on employees.
