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Posted on APR 25, 2017

Is your business ready for a purchasing card program?

Have you ever considered a purchasing card program for your business? “A purchasing card program can be beneficial for a large business with sophisticated reporting needs, businesses with a large volume of low‐dollar purchases and any company that needs control of where employees can and cannot make purchases,” says Angela Rust, VP Card Based Product Manager, Johnson Bank.

Purchasing cards (also called procurement cards) allow businesses to take advantage of existing credit card infrastructure to make electronic payments for business expenses. They don't function exactly as credit cards do, though. One of the biggest differences is that they are non‐revolving; the balance must be paid in full each month.

Streamline your payables process

Purchasing cards allow your business to streamline the payables process, so you can 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 and reduce or eliminate petty cash.

With detailed reports on spending activity, purchasing cards allow your organization to identify strategic sourcing opportunities and potentially reduce the number of suppliers you use. The reporting tools also provide information that can enable you to discover previously undetected infractions of employee purchasing policies.

Purchasing card features

With a purchasing card program, you can set controls for each purchasing card issued to an employee—for example, a single‐purchase dollar limit, a monthly limit, merchant category code (MCC) restrictions and so on. Other typical features of purchasing card programs include:

  • Liability waiver protection. Receive protection, up to a certain dollar limit per transaction, from card misuse by employees.
  • Flexible authorization system and cardholder spending controls. “For example, if your employee is traveling to a conference and will need to exceed their usual daily limit, you can raise the limit temporarily,” Rust says.
  • Easy integration with accounting and payment systems. Eliminate manual processes such as data entry and filing.
  • Automated reporting and complete expense management. Enjoy robust reporting capabilities and standard reports available to export in many formats.
  • Simplified accounts payable process. Monitor preferred supplier spending and negotiate pricing accordingly.
  • Tax and compliance management support. A purchasing card program can reduce or eliminate most common 1099 reporting issues.

Ready to get started?

Johnson Bank offers the Elan One Card that integrates payment for travel, purchasing and fleet management. It offers the worldwide acceptance of the Visa® network, no annual card fees and potential rebates for qualifying companies. The Elan One Card comes with no‐cost, web‐based card management tools so you can manage and control cardholder accounts anytime, anywhere. Contact your Johnson Bank advisor to explore whether a purchasing card program is right for your business.