Did you know there’s a way to let employees pay for business-related goods and services, all while saving your company money and lowering the number of purchase orders, invoices, petty-cash transactions, and checks your accounting team has to deal with?

It’s called a purchasing card — a handy tool that allows everyone from small businesses to large corporations to use the credit card infrastructure that already exists to make business-to-business (B2B) electronic payments for a variety of eligible expenses. In fact, approximately 70% of all organizations use purchasing cards.


What is a purchasing card?

In the simplest terms, a purchasing card (also called a P-Card, purchase card, or procurement card) is very similar to a consumer credit card. It works the same way — allowing you to improve the efficiency and effectiveness of your purchasing processes.

Take a look at this — industry research shared by Bento shows that the actual transaction costs for processing a request and approval are the same no matter how much an item is worth. What does this mean for small business owners in the Houston market? Well, since those costs add up to between $50 to $200 per transaction using traditional payment processes, many transaction costs might actually exceed the value of small items or services you’re paying for.

Crazy, right?

Also, when comparing a P-card to a credit card, as the account holder, you must pay your P-Card balance in full every month — no minimum payment options or balance rollovers are allowed.


How is a purchasing card different than other commercial cards?

A purchasing card is just one of many commercial cards, which is an umbrella term for various card types used for business-to-business (B2B) payments. Let’s take a closer look at some of the various types of commercial cards:

  • As a reminder, a purchasing card is a charge card used for business purchases of goods and services. Your business can issue purchasing cards to specific users, limit spending to certain amounts, and designate both eligible purchase types and locations.
  • A declining balance card is almost identical to a P-Card, except it has a pre-set spend limit and expiration date that is typically non-replenishing. Declining balance cards are also referred to as controlled value cards.
  • Business cards can be issued as credit or debit cards. These are usually used by small businesses to cover various business-related expenses and allow business owners to keep their personal and business spending separate. The debit card version would be tied to a business’s checking account, and spending would be limited to that account balance.
  • A corporate card (also known as a travel card) is commonly issued to an employee of a larger business for travel and entertainment (T&E) expenses.
  • A fleet card allows its carrier to pay for specific fleet-related expenses, such as fuel or vehicle maintenance, repair, and service.
  • Prepaid cards are debit-based cards on which card transaction amounts are deducted from a funded account. Depending on their purpose, prepaid cards may or may not be reloadable.
  • A one card is a “hybrid” card issued to an employee for more than one category of expenses, such as purchasing goods and services and travel expenses. This eliminates the employee from needing two (or more) different cards.


As a small business owner, would a purchasing card benefit me?

Yes! According to the National Association of Purchase Card Professionals (NAPCP), when organizations switch from a traditional payment process to a P-Card process, efficiency savings range from 55% to 80% of the traditional process’ cost. An evaluation performed by the NAPCP shows that P-Card usage saved a whopping $63 per transaction.

Here are a few types of purchases commonly made with P-Cards:

  • Office supplies
  • Printing and advertising expenses
  • Shipping/courier expenses
  • Subscriptions, membership dues, event registrations
  • Catering for business events

Beyond boosting your balance sheet, P-Cards may be able to help your business better track expenses, procure goods and services faster, and eliminate the need to have petty cash on hand. In fact, your business’s ability to pay with a purchasing card might even help you get better deals from vendors and suppliers!

One more thing — if your business revolves around supplying others with what they need to operate their businesses successfully, the benefits of allowing purchasing card usage far outweigh the costs it takes you to accept them. Here are a few of the best reasons to allow your business clients and customers to pay with P-cards:

  • Your invoice creation, handling, and mailing costs will be reduced, as will time spent depositing processing payments
  • Funds are electronically deposited, which leads to you getting paid quicker, faster receipt of payments, and improved cash flow
  • The potential for increased sales, as many organizations solicit only suppliers that allow payment with purchasing cards


What are the pros and cons of using a purchasing card?

Before you decide to implement a purchasing card program at your business, it’s essential to make sure it is the right choice for you. The <Next Level Purchasing Association has put together this list of advantages and disadvantages that may help you decide. Here are a few of the highlights:



  • Purchasing cards reduce the cycle time of purchasing transactions and can improve supplier relations, as suppliers receive payment within two to five days
  • Purchasing cards can reduce the number of supplier invoices, which could lead to a reduction in expenses on accounts payable personnel
  • With proper controls, purchasing cards can restrict purchases from non-authorized categories of goods and services and provide greater transparency in how money is being spent
  • Purchasing card programs foster a feeling of empowerment among employees



  • The work involved in reconciling a purchasing card statement with a purchase log and distributing charges to the proper accounts can divert resources from value-added work
  • Multiple ways of placing orders (such as purchasing cards, eProcurement, ERP, and requisitions) can confuse requisitioners who may not know the proper method for each type of purchase
  • Purchasing card spend data may not be integrated with other purchase data, resulting in incomplete information when conducting spend analysis


We’re Here to Help

At Central Bank, we take your business personally. And we’ve been providing customized financial solutions to Houston businesses since 1956. So, whether you're looking for more information about purchasing cards or other convenient financial services in Houston, we’d ready to help you meet — and exceed — your business goals. Get started by calling 832.782.5242 today!