If you’re looking to give your employees the ability to make business-related purchases without asking them to use their own money, fill out expense reports, or wait to be reimbursed, you might consider a purchasing card, or “p-card.”
In this article, we discuss how p-cards work, the benefits they provide, and how you can choose the right card for your business.
Key Takeaways
- Takeaway #1: P-cards, or purchasing cards, are company-issued credit or debit cards that allow authorized employees to make business-related purchases while they’re away from the workplace.
- Takeaway #2: P-cards typically have more controls and restrictions than corporate cards and business credit cards. Because of this, p-cards are generally assigned to employees, while managers, C-suite execs, and owners typically use a corporate card or a business credit card.
- Takeaway #3: The benefits of using a p-card include simplified expense management, no need for an expense reimbursement program, advanced spending controls, improved compliance, and increased efficiency.
What Are P-Cards (Purchasing Cards)?
P-cards, or purchasing cards, are company-issued credit or debit cards that allow authorized employees to make business-related purchases while they’re away from home base.
P-cards streamline the purchasing process by eliminating the need for employees to carry large amounts of company cash or use their own money and have to fill out an expense report to be reimbursed.
How Do P-Cards Work?
After setting controls and policies, a manager or owner distributes p-cards to qualified employees. Employees can then purchase business-related goods and services according to company policies, regulations, and guidelines.
When the bill arrives — typically once a month like a regular credit card — the business pays for those purchases out of its own account.
With a p-card, businesses can eliminate the cumbersome reimbursement process entirely and gain even more control over employee spending.
P-Card Vs. Corporate Card Vs. Business Credit Card
P-cards, corporate cards, and business credit cards might seem interchangeable, but the real difference lies in how much control they give you over spending.
P-cards typically include more controls and restrictions, while corporate cards and business credit cards offer more basic controls.
Because of this, p-cards are typically assigned to employees, while managers, C-suite execs, and owners use a corporate card or a business credit card.
Here’s a more extensive breakdown of how a p-card compares to a corporate or business credit card.
- Spending control. P-cards come with extensive controls (e.g., vendor restrictions and spend limits, just to name a few) while corporate cards and business credit cards have limited controls.
- Purchase tracking. P-cards typically offer automatic tracking options so that you’re up to date when a purchase happens. Corporate and business credit cards require you to manually track purchases.
- Approval process. P-cards allow you (the card manager) to pre-approve purchases within specific limits, while corporate and business cards may require employees to go through a time-consuming approval process before they can make the purchase.
- Expense reporting. P-cards often provide automated reporting (e.g., receipt collection and matching), while corporate and business cards rely on manual receipt matching.
- Fraud prevention. P-cards come with a lower risk of fraud thanks to stricter compliance settings and real-time monitoring. Corporate and business cards often come with a higher risk of fraud because they offer fewer spending controls.
The Benefits Of Using A P-Card
Simplified Expense Management
Many businesses still use an outdated method of expense management that includes things like written purchase requests, using personal money for business spending, and manual tracking.
P-cards streamline the process by eliminating many of the hurdles that make employee spending so difficult. With a p-card, employees have the freedom to purchase what they need (within the framework you set, of course) and the bill comes straight to your business.
No complicated paperwork or approval that makes your job, and your employees’ jobs, more difficult.
No Expense Reimbursement Program
With a p-card, you can completely eliminate your company’s reimbursable expenses program while still giving your employees the freedom to purchase goods and services that help them get the job done better and faster.
This can be especially useful for field technicians, drivers, and other employees who work away from the home office.
Using a p-card gets rid of the time-consuming tasks of filling out expense reports, getting the expenses approved, and waiting for the business to cut checks as repayment.
Advanced Spending Controls
One of the biggest benefits of using a p-card is the advanced spending controls that give you the ability to set variables for your expense management, including:
- Where purchases can be made
- How much can be spent
- What can be purchased
With some p-cards, you can even set the time of day when employees can or cannot buy goods and services so they don’t overspend or make unauthorized purchases.
Improved Compliance
P-cards typically offer detailed transaction reporting.
That feature makes it much easier to monitor spending, keep accurate records, and maintain company, local, state, and federal compliance for things like taxes and the International Fuel Tax Agreement (if it applies to your business).
Incorporating a p-card into your spend management process can also make it easier to monitor and comply with company policies regarding fuel use, fuel costs, vehicle maintenance, T&E expenses, and a long list of others.
Increased Efficiency
Under standard reimbursable expense systems, finance managers spend a lot of time reviewing expense reports, tracking down receipts, and making sure that all records are up to date and accurate.
With the right p-card solution, finance managers and accounting staff won’t get bogged down with all the paperwork and details that go into keeping a reimbursable expense system running.
Choose The Right P-Card For Your Business
If you’re looking for the control of a purchasing card without the complexity of traditional corporate card programs, and you own a fleet of vehicles, Coast is built for you. With Coast, every card is configurable, so you can decide where, when, and how it can be used. That means fewer rogue purchases, better policy compliance, and full visibility into company spending in real time.
- Customizable controls on every card to limit spending by category, merchant, or time.
- Real-time visibility into transactions as they happen—no surprises at month’s end.
- Automatic receipt capture and memo prompts to keep records complete and audit-ready.
- Seamless integration with accounting software for faster, more accurate reconciliation.
- Easy card management for teams of any size, with the flexibility to issue, pause, or adjust cards instantly.
Coast doesn’t just help you manage expenses, it helps you take control of them. To learn more about how Coast can help your company, visit CoastPay.com today.
Frequently Asked Questions
What happens if a p-card is lost or stolen?
What your employee should do if their p-card is lost or stolen depends on your company credit card policy.
In most cases, cardholders should immediately report a lost or stolen card to the business’s p-card administrator. The administrator can then contact the lending company to cancel the card to prevent unauthorized purchases.
In some cases, like with Coast, administrators can deactivate a lost or stolen card on their own with just a few taps or clicks on their business dashboard.
Can p-cards be used for online purchases?
Yes, p-cards can be used to make purchases online. Of course, the vendor must accept credit card payments and the purchase must comply with your business’s spending policy.
If you’re worried about unauthorized spending online, choose an advanced p-card that comes with spend controls. These controls allow you to set a wide variety of variables, including where the card can be used, when the card can be used, and how much can be charged.
This makes it possible for you to restrict spending to only authorized retailers, so you don’t have to worry about theft or fraud occurring online.
Which of my employees should I give a P-card to?
That’s entirely up to you, but most businesses put in writing some type of eligibility criteria that describes the qualifications for carrying a company p-card.
This criteria typically includes job/position, their need to make frequent purchases, training, approval from manager or department head, items to be purchased.
Regardless of the criteria you use, keep a list of all authorized cardholders so that you know who has permission to spend your company’s money.
