Print Page   |   Contact Us   |   Your Cart   |   Sign In   |   Learn More
NAPCP Search
Why Use Purchasing Cards?

Why Use P-Cards?

The traditional procure-to-pay process is costly

The transactional, or process cost, of using a traditional procure-to-pay process—often involving a requisition, purchase order, invoice and check payment—is the same regardless of the dollar amount of the purchase. In other words, the process cost of a $25 purchase is the same as a $10,000 purchase. Often, the process cost exceeds the value of the item being acquired (e.g., the cost to acquire a $25 wrench may exceed $100). Estimates of the process cost of the traditional process range from $50 to $200.

A P-Card program simplifies the process

Most organizations recognize that a large number of check payments are made for low-value items to a large number of suppliers—a costly, inefficient process. When the payment method is switched from the traditional process to a Purchasing Card process, efficiency savings range from 55% to 80% of the traditional process cost. Per an NAPCP evaluation, typical savings resulting from P-Card usage are $63 per transaction. (Members and complimentary subscribers, view the complete P-Card value proposition. Not either one? Join today.)

Overall, P-Cards provide a means for streamlining the procure-to-pay process, allowing organizations to procure goods and services in a timely manner, reduce transaction costs, track expenses, take advantage of supplier discounts, reduce or redirect staff in the purchasing and/or accounts payable departments, reduce or eliminate petty cash, and more. Originally, P-Cards were targeted for these low-value transactions, but their use has expanded as the industry has grown.

P-Cards also benefit suppliers

Suppliers that accept P-Cards for payment can reap considerable benefits to outweigh the costs related to card acceptance. Benefits include:

  • cost reductions, such as eliminating invoice creation, handling and mailing; depositing payments and collection activities
  • electronically deposited funds
  • faster receipt of payments and improved cash flow
  • increased sales, as many organizations solicit only suppliers that accept P-Cards as payment
  • customer satisfaction
  • potential staff reductions within accounts receivable and the ability to redirect staff to more value-added activities


 

 

Become an NAPCP member or complimentary subscriber to gain greater access to educational resources, including a comprehensive webpage addressing the P-Card Value Proposition; participate in polls and surveys; and receive P-Card news and event notifications.

Next page (P-Card Process and Key Players)

Sign In
Sign In securely
Featured Items
Event Calendar

8/23/2017
NAPCP Website Tour

9/20/2017 » 9/21/2017
2017 NAPCP Canadian Commercial Card and Payment Conference - Toronto

10/17/2017
Capital One Virtual Demo: Raising the Bar on Digital Product Development

11/16/2017
MUFG Virtual Demo: ePayable Payments Without the Reconciliation–Keeping the Buyer in Control

1/31/2018
An Interactive Look Into the Certified Purchasing Card Professional Credential

Copyright © 1999 - 2017 NAPCP - Advancing Commercial Card & Payment Practices Worldwide
Certified Purchasing Card Professional Credential 
The next application due date is Aug. 31, 2017
for the October 2017 testing period.

Complimentary resource for all website visitors.
Report free to NAPCP members. Executive Summary free to members and complimentary subscribers.