Level 3 eliminates payment reconciliation for you while providing various levels of transaction data for your customers – all with one swipe of a card.
Why Accept Purchasing Cards?
It Benefits Your Customers
Millions of business-to-business customers today enjoy the benefits of increased transaction information while they do nothing more than present a credit card for purchases.
It Benefits You
The millions of businesses using purchasing cards need suppliers that can accommodate them. Accepting purchasing cards gives you the opportunity to fit that bill and become a preferred supplier – helping you retain your current customers and increase your potential for new business. In addition to positioning you as a preferred supplier, Purchasing Card Programs reduces your invoicing costs and your collection time. Receive payment in 24 to 48 hours, instead of the usual 30, 60 or 90 days typical of the invoicing/billing method.
Government agencies, universities and medium to large businesses are the primary organizations using purchasing cards. Each year, businesses like these process over $400 billion worth of “small dollar purchases,” ranging from office supplies to computers to professional services. These purchases traditionally involve labor-intensive, paper-based procedures that often cost more than the purchase itself. Purchasing cards are significantly reducing these purchasing expenses by replacing requisitions, purchase orders and checks for payment with a simple credit card transaction.
Various Information Levels Available
Purchasing Card Programs offers several levels of information – including Level II or Level III processing. Level II captures sales tax amount and customer code information (similar to a personal identification number) at the point of sale. Level III captures the information found in Level II plus line-item transaction detail like quantity, item description, purchase order number and more.
With one simple program you can stay competitive in the business-to-business world, attract new business and increase your profits. Purchasing Card Programs from offers your customers the convenience of detailed transaction information while providing a simple payment solution that works for you and your customers.
Benefits To You
- Improved cash flow: By accepting purchasing cards, you will receive payment within 24 to 48 hours, instead of the 30, 60 or 90 days typical of the traditional invoice/billing process.
- Reduced paperwork and invoicing: Accepting purchasing cards eliminates the need to prepare paper invoices because transaction information is generated and captured electronically.
- Reduced billing and collection expenses: You will no longer need to send invoices to customers who use purchasing cards. Invoices and payments are processed electronically through the purchasing card payment system – saving you the time and expense of billing, collection and postage.
- Enhanced competitive position: You will gain preferred vendor status by accepting purchasing cards and providing your customers with the enhanced transaction data they want.
- New sales channels: Promoting your ability to accept purchasing cards is likely to attract new customers, given the growing number of organizations that already utilize purchasing card programs today.
- Reduced interchange fees: When you provide enhanced transaction data, your transactions qualify for reduced interchange fees, resulting in savings for you.
Who Uses Purchasing Cards?
Government agencies, universities and medium to large businesses are the primary users of purchasing cards. These organizations have found purchasing cards useful for purchases from inventory to supplies and raw materials:
Levels of Transaction Information
Purchasing Card Program, position your company as a preferred supplier by providing the level of transaction information your customers want.
Standard transaction data is available to your customers with Level I processing:
- Card Number
- Total Transaction Amount/Date
- Merchant Name
- City, State and Zip Code
- Merchant Category Code
With Level II processing, your customers receive the standard transaction data available in Level I as well as additional information, gathered at the point-of-sale:
- Sales Tax Amount
- Customer’s Accounting Code
Note: MasterCard requires you to provide the following information for interchange qualification purposes only; it will not show up on a customer’s receipt:
Federal Taxpayer Identification Number
Merchant Type Code
The most comprehensive level of transaction data is Level III. Customers receive all information provided in Level I and Level II processing, as well as the potential for nearly unlimited line-item detail – similar to that on a purchase order receipt. Just some of the details available with this processing level include:
- Customer Purchase Order Number
- Discount Amount
- Freight/Shipping Amount
- Item Stock #
- # of Units Ordered
- Product Descriptions
- Destination Postal/Zip Code
- Ship From Postal/Zip Code
- Order Date (YYMMDD)
Why Should My Business Accept Purchasing Cards?
The reason is simple: purchasing cards streamline the complicated purchase order process. For both businesses and suppliers, purchasing cards eliminate the time and paperwork associated with requisitions, approvals, purchase orders and invoice processing.
With traditional purchasing processes, small-dollar purchase fees are often more than the purchase itself. Therefore, it is no longer economical to use the traditional purchase order process for many purchases under $5,000.
Businesses that have discovered the economic advantages of buying supplies and services with purchasing cards naturally prefer suppliers that welcome this form of payment.
How Will My Company Benefit?
Accepting purchasing cards improves your cash flow and reduces your billing and collection costs. Industry statistics indicate the cost to produce, mail, process and reconcile an invoice and payment can reach as much as $50. Collection time is also a concern. It can sometimes take 30, 60 or 90 days after invoicing to receive payment. Accepting purchasing cards eliminates the need for invoicing, which decreases billing costs and reduces collection time to just 24 – 48 hours.
When you accept purchasing cards, you receive payment directly from the bank, so you don’t have to worry about getting paid.
How Does Level III Processing Work?
First, you choose the card processing option (such as point-of-sale terminal or personal computer software) that best fits your company’s needs. Once your processing option is in place, accepting purchasing cards is easy:
1.Your customer places an order in person or by phone.
2. At the time of purchase, you enter the transaction information.
3. The transaction is quickly authorized through your electronic processing system, and the sale is completed.
4. Your customer receives a receipt describing the items purchased, total amount of the sale, and any taxes paid.
That’s all there is to it. It’s as simple as a traditional credit card transaction!
How Can I Provide My Customers with More Transaction Information?
By accepting purchasing cards, you can provide your customers with purchase information electronically – helping them comply with tax regulations, meet reporting requirements, and simplify expense reconciliation. There are three levels of information available for you to provide to your customers. Level I is basic information, typical of a standard credit card transaction. Level II and Level III offer standard data in addition to a variety of additional information your customers may find valuable.
Level II Processing
With Level II, your customers receive sales tax amount and customer code information at the point of sale.
Level III Processing
This processing level represents line-item information similar to what you might see on a purchase order receipt. This information helps companies monitor and report detailed purchasing behavior. With this information companies can reconcile item quantity, unit price, shipping costs, and other item-specific information.
* Becoming Level III capable requires a PC-based point-of-sale system.