Virtual Cards and P2P Benefits
Emily Chandler - Account Director

The Benefits of Combining Virtual Card Systems with JAGGAER

  • Blog
  • Construction
  • eProcurement
  • Procure to Pay

In many sectors of procurement cards or p-cards have become the norm for purchases up to a certain value and certain categories of spend. Quite simply a p-card is a company charge card tied to a bank account with the intention of making buying easier and more efficient than going through the usual purchase order procedure. They became mainstream more than a decade ago and bring a number of additional advantages. They are great for suppliers, who get faster payments, and great for buyers as it reduces the number of inbound invoices, thus relieving accounts payable departments of a lot of manual effort. And they are good for employee relationships as the users feel more empowered.


Read how to get greater transparency over indirect spend in our white paper.

Download it here. 

The Downside of P-Cards

On the other hand, the disadvantages of p-cards often outweigh the advantages. For one thing, they may actually turn out to waste more time than they save if employees whose focus is not procurement are ringing round different suppliers and placing orders. There is also scope for error when supplying the card details, as Balfour Beatty found in the past. The work involved in reconciling a procurement card statement with a purchase log and distributing charges to the proper accounts can divert resources from value-added work.

P-cards also increase the incidence of maverick spend – the purchase of goods off-contract, possibly including non-authorized goods and services, and they can expose the organization to the risk of undetected credit card fraud and identity theft, which can result not only in lost money but also reputational damage. It is not uncommon for them to be misused accidentally and unintentionally by employees who don’t fully understand how the system works.

Moreover, p-cards do not provide the visibility over spend and transparency that you get using eProcurement software. If there are multiple ways of paying (eProcurement, p-card, through an ERP system or paper-based requisitions etc.) it can be really difficult for finance teams to stay on top of things.

Adapt and Overcome

Many of these issues can be overcome with a virtual card, such as the JP Morgan single user account (SU) or a Discover digital wallet, integrated with your JAGGAER ONE procure to pay platform. Instead of issuing everyone in the organization with a physical p-card with its own credit card number there is just one account that generates a unique number for each transaction. So, as well as being user-friendly it is much more security-friendly, making it much easier to eliminate maverick spend and fraud risk. A JP Morgan SUA has been set up recently as part of a JAGGAER implementation at the University of North Dakota, bringing benefits such as prompt payment discounts.

Integrated with JAGGAER, everything is on one system, which means users can place several orders at one time, and it always goes through and you can control spend by directing buyers to approved suppliers. And with everything going through the P2P system it is easier to score suppliers and subcontractors in a positive manner, enabling procurement organizations to work with those who need improvement plans and reward those that are performing very well. And you will have complete information for conducting spend analysis.

By moving away from a conventional p-card system and setting up a P2P solution with an integrated virtual card, organizations can retain the benefits, such as convenience and ease of use, but they will also see a host of other benefits such as greater transparency , a reduction in aged debts, less risk and more efficient, automated batching of payments.

Indirect spend management

Discover the white paper “Indirect Spend Management: Six Challenges Caused by Lack of Transparency and How to Overcome Them”.

Download it here. 

Related Blog Posts