One of the best ways to improve your company’s financial performance is to streamline the purchasing process. Using a commercial credit card with purchasing card capabilities (also known as p-cards) or corporate travel and entertainment (or T&E) cards can offer a wide range of benefits to businesses of all sizes, not just large corporations.
Commercial cards have been issued to employees to pay for business and T&E expenses for some time. Originally companies started using purchasing cards to eliminate the traditional procure-to-pay process, including a requisition, purchase order, invoice handling and check payment for buying low-value items like supplies and maintenance, repair and operations (or MRO).
According to a study published by the Association for Financial Professionals (AFP) the fully loaded purchase order process costs about $70 per purchase order, which is far more than the cost of many low-value items. Paying for these items with a commercial card eliminates the purchase order requirement, which can drastically reduce procurement costs.
The use of purchasing cards has now expanded to further streamline the payment process by integrating p-card payments into the accounts payable (A/P) process for larger dollar transactions. Purchasing cards are becoming part of the overall disbursement strategy for many companies of all sizes.
Common Uses for Purchasing and T&E Cards
Purchasing cards are commonly issued to employees to pay for everyday business purchases like office supplies and gasoline, as well as travel expenses, including meals, hotels, rental cars and airline tickets. Using a commercial card for these kinds of purchases is more convenient than writing checks and safer than using cash.
Purchasing cards also provide businesses greater expense control. By using merchant category codes (or MCCs), your business can restrict card usage. These codes can be opened or closed on a card-by-card basis — if an employee tries to use a commercial card to make purchases on a closed MCC code, the transaction will be declined at the point of sale.
You can also limit the amount that can be spent on commercial cards issued by your company. Preset spending limits can be set per card or employee or by the day, month, quarter or year. This gives your business more control over a wide variety of different kinds of employee expenditures.
Another benefit of using commercial cards is the detailed, granular level of expense reporting and information that you’ll receive from your card provider. This information enables you to conduct actionable analysis on spending practices that may help you better negotiate discounts with suppliers.
Transaction information can be viewed online at the employee level or by entire business units. Detailed spending information includes the dates of transactions and posting, the amount of purchases and the businesses where purchases were made.
And, transaction information can easily be downloaded into the most popular small business accounting programs (like Excel® and QuickBooks®, for example) to simplify and streamline your internal accounting and reconciliation processes. Further, your employees can complete their expense reports online and email them to their approving managers.
Summary of Purchasing Card Benefits
- Reduce operating costs by eliminating the need to create supply requisitions, purchase orders, handle invoices and issue check payments
- Improve cash flow by issuing payments to suppliers early using the purchasing card in order to take advantage of discounts, while at the same time being able to ultimately pay the amounts later when the purchasing card bill is due
- Increase control and visibility of company purchases and employee spending
- Streamline accounting and reconciliation processes with data export capabilities
The City National Visa® Commercial Card
The City National Visa Commercial Card with City National Rewards® is a versatile card that will meet all of your business’ commercial card needs. The card is accepted at millions of locations worldwide, including online merchants, office supply stores, restaurants, hotels and more. With the City National Visa Commercial Card you have the option to pay balances in full each month or pay over time, which gives your business more financial flexibility.
This City National Visa Commercial Card offers the benefits described above, as well as the robust City National Rewards program through which your business can earn one Point for every dollar spent on City National Commercial Cards registered to your business. These Points1 can be redeemed by your business for a wide range of items, including airfare, hotels, rental cars, gift cards, merchandise and other exclusive offers.
Points from all of your City National Visa Credit Cards (both business and personal) that come with City National Rewards can be combined into a single Rewards account. There is no annual cap on how many Points you can earn, and Points do not expire as long as your Commercial Card account remains open and the Rewards program has not ended2. Or, if you prefer a Commercial Card without City National Rewards, you can choose a Visa Commercial Card without Rewards that has no annual fee.
1Points are earned on net purchases only (purchases less returns and credits). PIN-based and ATM transactions do not earn Points.
2If the Commercial Card account is closed for any reason, any unredeemed Points remaining on the date of account closure are forfeited and expire. If the Rewards Program is terminated for any reason, you will be notified, in which event you will have at least 60 days to redeem your Points. After this redemption period, any unredeemed Points will expire.