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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.

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News
Event Calendar

10/23/2018 » 10/24/2018
Canadian Workshop: Commercial Card Program Management—Beyond the Basics

10/31/2018
Compliance Monitoring: Safeguarding Your Program and Reducing Organizational Risk

11/7/2018
NAPCP Commercial Card Regional Forum - Tampa, FL

11/8/2018
Oversight Systems Virtual: Mitigate Financial Risk in Your P-Card Program with AI-Powered Analytics

11/15/2018
Build Your Communications Toolkit for Everyday Use—Government/K12 Virtual Roundtable

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Certified Purchasing Card Professional Credential 
The next application due date is Feb. 28, 2019 to take the
exam at the 2019 NAPCP Annual Commercial Card and Payment Conference in Miami, on April 15, 2019.

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