Purchasing card (P-card)
A company card for buying goods and services directly from suppliers, used in place of purchase orders for small, routine purchases.
In short
- P-cards replace the purchase order and invoice process for low-value buying.
- Controls come from card limits and allowed merchant categories rather than approvals before each purchase.
- They differ from travel cards, which are meant for trips and entertainment.
A purchasing card, or P-card, is a company card given to employees who buy supplies, parts or services for the business. It exists to take small purchases out of the formal procurement process, where raising a purchase order, receiving goods and processing an invoice can cost more than the item itself.
How controls work
Because there is no approval before each purchase, control comes from how the card is set up:
- Per-transaction and monthly limits
- Allowed merchant category codes. A card for lab supplies cannot be used at a restaurant
- Blocked categories, such as cash withdrawals or gambling
- Review after the fact, with receipts matched and transactions checked by a supervisor
P-card versus corporate card
The difference is mainly purpose. Corporate or travel cards are for travel, meals and entertainment. P-cards are for operational buying: office and cleaning supplies, maintenance parts, small software purchases. Public sector bodies and universities use them heavily. In practice, many modern card programs issue one card type and apply different rules per cardholder.
The main risk is P-card spending leaking around negotiated contracts. Buying from a preferred supplier at the contracted price saves money that an ad hoc card purchase does not.
Worked example
A maintenance team's card
A facilities technician has a P-card with a $1,000 per-transaction limit and a $5,000 monthly limit, restricted to hardware, electrical and plumbing merchants. They buy $342 of replacement fixtures without raising a purchase order. The receipt is matched to the charge and coded to Building Maintenance, and their supervisor reviews the month's charges at month end.