Posted:
November 28, 2023
Updated:
March 19, 2024
In recent years, the corporate world has witnessed a surge in various types of commercial and corporate business credit cards.
This increase, driven partly by the pandemic-induced shift towards digital payments and a growing acceptance of credit card purchasing by vendors, has significantly streamlined procurement processes. However, it has also introduced new complexities for finance, accounting, and procurement teams learning how to navigate this evolving landscape.
Let’s take a look at the various corporate card types available today, and demystify the implications and opportunities that vendor cards might present for procurement operations within your business.
Types of Commercial Cards
Purchasing Cards (P-Cards)
Purchasing cards, commonly known as P-Cards, are physical cards predominantly utilized for low-value, high-frequency transactions. These corporate cards streamline the procurement process by bypassing the conventional requirements of purchase orders in invoices for minor business expenses.
However, P-Cards present challenges in maintaining visibility and control. The lack of approval processes for purchases heightens the risk of fraud and abuse. Accounting teams may find themselves in a scramble for receipts at month-end to account for unauthorized or unmonitored spend.
Commercial Credit Cards
These credit cards are used for a variety of business expenses, offering flexibility, credit score-building opportunities, and even perks from various card programs. They often have higher credit limits than P-Cards, providing more flexibility for cardholders and business owners.
The challenge for procurement lies in controlling and categorizing the spend, as these corporate credit cards are often used to purchase a wide range of products and services, making it difficult to track and allocate budgets effectively.
Commercial Debit Cards
Similar to commercial credit cards but drawing on your company’s bank account directly, commercial debit cards, or charge cards, are often used for operational expenses. offer less risk in terms of credit implication, but can be a challenge to monitor and reconcile these kinds of commercial cards with procurement budgets and compliance.
Travel and Entertainment Cards (T&E Cards)
Specifically designed for travel-related business expenses, these corporate cards help in maintaining separation from other types of spend. Managers can set spending limits, implement location-based security measures, and keep an eye on expense reports.
While separating travel expenses can be useful to help close the books, it’s important to ensure compliance with travel policies and other budget allocations. Like purchasing cards, T&E Cards can be a hot-spot for fraud and misuse if not managed properly.
Vendor Cards
Vendor cards, temporary virtual cards issued specifically for procurement or paying vendors, can integrate into a broader procure-to-pay ecosystem such as Zip. They are designed to streamline card transactions with established vendors, offering better control and efficiency in managing recurring or one-time, low value expenditures from intake to payment.
Why Procurement Needs Vendor Cards
Zip vendor cards represent a pivotal shift in managing and empowering B2B spend.
These cards aren’t typical corporate cards—they’re part of an integrated system designed to address common issues like rogue spend, inconsistency in spending practices, and misuse of the various types of cards. This makes Zip vendor cards a practical solution for businesses seeking better control and insight into corporate expense management.
Another key advantage comes from increasing employee adoption due to seamless integration with the procurement platform. Businesses can manage all vendor and employee spending in one place, accommodating numerous requesters and payment methods. The process of issuing cards is fully integrated into the request flow, ensuring a frictionless experience throughout the entire procurement process.
Vendor cards can also significantly reduce risk by automating cross-functional approvals. This automation helps not only in vetting vendors and reviewing contracts, but can also play a crucial role in managing cash flow and mitigating financial risks.
Zip provides end-to-end control, purpose-built to manage and contain corporate card expenditure. At the same time, it opens opportunities for speed and savings on a broader scope of addressable spend, striking the perfect balance between control and cost-effectiveness.
How Zip Vendor Cards Work
Zip vendor cards automate controls for recurring and one-time purchase by linking payments with intake. By integrating virtual cards into wider vendor management workflows, companies can achieve faster, more compliant, and transparent spending practices.
Our cards differ from traditional corporate cards and commercial cards in its integration and control mechanisms. They are specifically designed to work within a fully integrated procurement system, offering real-time visibility, approval flows, and control over payment processes.
Zip ensures that business expenses are aligned with company policies and procurement strategies, dramatically improving the employee experience.
Zip Vendor Cards Streamline Procurement Strategy
Understanding the different types of corporate and commercial cards and their impact on procurement is crucial for business workflow.
With advanced solutions like Zip's vendor cards, companies are now better equipped to manage their procurement processes than ever before, ensuring more efficient, controlled, and transparent spending.
