What is a Purchasing Card?
Purchasing cards are just like credit cards or more exactly corporate or charge cards. They are physical pieces of plastic that allow the holder to spend money but they are different from ordinary credit cards, corporate cards or charge cards in a few key respects.
With an ordinary credit card, the card statement contains very simple information: The date of a transaction; the merchant name; the amount of the transaction. This level of information is not sufficiently details for businesses which is why, when credit cards are used for business purchases, invoices are retained because these contain more detail about what was bought.
Purchasing Card statements are different. The statement contains all of the information that would normally be expected in an invoice including: Description of goods bought; quantity; amount paid; tax paid. This levl of detail (and much more detail is possible) allows the business to use the card statement and dispense with the need to retain invoices. This is especially advantageous if the statement is received electronically because it allows the business to reconcile the statement automatically with purchase order if they have been used and or record the card transactions in the finance system automatically.
Using purchasing cards can dramatically reduce the administration cost of small purchases for a business.