More companies are jumping on the p-card bandwagon each day.

But the use of p-cards has also opened a new avenue into purchasing fraud. As part of implementing any sort of p-card system, businesses need to be thinking two steps ahead, to anticipate potential fraud and to cut it off at the pass.

Fortunately, the financial services wizards at JP Morgan have come up with effective strategies for putting the kibosh on would-be fraudsters.

Five tactics for preventing p-card fraud:

• The big cheese. Someone in higher management has to be in charge of overseeing anti-fraud efforts. This ensures the power to reach across departmental lines when necessary, and is the final word on p-card rules and uses.
• A level playing field. The regulations governing p-cards need to be consistent, across the board. Various departments can’t be allowed to “tweak” the rules — this usually leads to the creation of loopholes. More consistency, less confusion.
• First things first. Training is essential — before any p-cards are passed out. It’s easier to stick to the rules when you understand what those rules are and why they exist. It’s also a great opportunity to ask questions.
• Best defense is a good offense. Implement fail-safe measures that make it much easier for staffers who use p-cards to stick to the rules. These measures include spending limits per transaction; spending/use during specific time periods, and clearly designated “no man’s land” for p-card use.
• Easy does it. One of the best ways to monitor and regulate p-card usage is to maintain the type of environment where users feel free to step up and ask questions anytime there’s the slightest bit of confusion. Some users fear they’ve done something wrong and don’t want to get into trouble for it. If there truly is a concern, the sooner it’s raised, the sooner it can be remedied.

Tags: fraud, p-card, purchasing, spending