Organizations are always looking for ease and convenience when it comes to managing expenses and expense entries. In order to protect their bottom line, keeping expenses in check while simultaneously maintaining ease and efficiency is a top priority for executives and organizational leaders. Catering to these two priorities has oftentimes been difficult, until the development and rise in popularity of purchasing cards in the mid-2000s. For enterprise organizations utilizing Oracle’s Cloud ERP solution and not already taking advantage of procurement cards, we’ll dive into the details of what a procurement card is and how it can be used in Cloud ERP.
What are P-Cards?
When it comes to corporate expenses, procurement, purchasing, or p-cards are a solution many organizations are already taking advantage of. Procurement cards are a type of company charge card used for convenient company purchasing. P-cards are a purchasing option geared towards companies with a variety of small value, high-volume asset purchases from specific and often frequented vendors. Procurement cards offer a secure and controlled solution to purchasing that can provide organizations and employees alike with ease and peace of mind that spending occurs within the company guidelines.
Why are P-Cards Useful?
At their core, P-cards offer ease of use and convenience for employees tasked with purchasing assets for company use. They also offer a more controlled means of managing expenses for employers. Unlike corporate cards that can be used for more personal work-related expenses such as travel meals or transportation, P-cards are a tool that can be used for specific suppliers that are specified by the employer.
It’s possible to create a procurement card that is specific to a single vendor or multiple. More than invoicing or other payment methods, P-cards oftentimes offer a source of revenue due to the rebate that comes with having a P-card. Depending on the contract with the card issuer, there is usually a 1-3% rebate associated with using a P-card. Particularly with large volume purchases, this can be very beneficial.
P-cards give employees the ability to purchase what they need, but within corporate guidelines. They offer a way of cutting down on approval times and permissions needed to make a purchase. Employers can access the purchase right away and also track expenses easier. Finance departments in particular will appreciate P-cards due to the fact that they can put a threshold on the amount each card is permitted to spend and on which transactions. The workload of internal AP department employees is reduced due to the lack of manual payment processing required.
Suppliers will also appreciate P-cards due to the fact that they get their payments right away. The line of credit is established with the card issuer, which covers the expenses and avoids invoicing.
What Should Cloud ERP Users Know About P-Cards?
For organizations currently using Cloud ERP, P-cards offer a more controlled expense method that easily integrates with your existing payment processing. Employees won’t be reimbursed for specific expenses, and use of the card will generate an invoice to the card issuer. P-cards can be renewed for a specific period of time (monthly, yearly, etc.) depending on how you set up with the card issuer and this can be managed within ERP Cloud.
Oracle Cloud ERP users will see benefits such as greater departmental alignment, ease for the business user and AP teams, as well as set the foundation for expense processing to ensure that everyone is on the same page.
With P-cards integrated with Cloud ERP, processing is streamlined as manual invoicing isn’t required due to the fact that payments flow directly to your AP department and are more controlled.
Are There Any Considerations Cloud ERP Users Should Know About?
For most organizations using Oracle ERP Cloud, there shouldn’t be any problems implementing P-cards. Compliance is the largest potential obstacle to leveraging P-cards, due to the need for users to be trained and comply with any business process changes that are required as a result of using P-cards. The Cloud ERP system and technology can accommodate P-cards, but the organization needs to consider their current state and any training needed to adapt to the new process.
Your implementation partner can work with the card issuing company to set up your P-card program and processing. The good news is, activation of cards within the system is seamless.
No matter where your organizations’ business processes lie or how you’re utilizing Cloud ERP Elire’s team of Cloud experts are here to help your organization begin to utilize p-cards. Reach out to [email protected] to set up a time to connect with our experts or visit our Cloud services page for more information.
About the Experts:
Octavio Pedregal serves as a Cloud ERP Managing Consultant. He specializes in financial implementations and is responsible for implementing, maintaining, and coordinating with all clients using Oracle ERP Applications. Octavio has a long professional history and experience with a diverse client base. He works with clients to provide appropriate solutions based on their unique situations and needs.
Chau Mai-Paradee serves as Elire’s Cloud ERP Consultant II. Chau is responsible for requirement elicitation and implementation of Oracle ERP Applications for Elire clients. She provides technical support and functional training to all clients to ensure organizations fully utilize their solution offerings.