Purchasing Card (PCard)
Definition:
A PCard, or Purchasing Card, is a corporate credit card issued to employees for making authorized business purchases. It is a payment method that allows organizations to streamline the procurement process for low-value, high-volume transactions, reducing administrative costs and increasing efficiency.
Example:
Acme Corporation issues PCards to employees in its marketing department for purchasing office supplies, subscriptions, and other small-value items needed for their work. An employee uses their PCard to purchase a software subscription online, which automatically charges the company's account. The transaction is then reconciled with the monthly PCard statement, and the appropriate expense category is assigned for accounting purposes.
Why are PCards it important to Procurement?:
PCards are important to procurement teams as they provide a convenient and efficient way to manage small-value purchases, reducing the need for purchase orders, invoices, and checks. By delegating purchasing authority to employees through PCards, procurement teams can focus on more strategic, high-value activities. PCards also help to improve spend visibility, as all transactions are captured electronically and can be easily analyzed for patterns and opportunities. Additionally, PCards often provide benefits such as increased control through spending limits and merchant category restrictions, as well as potential cost savings through supplier discounts and reduced transaction fees.
See Travel and Entertainment Cards (T&E Cards) for a similar method of payment.