What is Procure-to-Pay?

Procure-to-Pay, also known as Purchase-to-Pay and P2P, is made up of a number of stages that describe the end-to-end buying process, from initial request and purchase through to invoicing and payment for good/services received. By simplifying these processes, you can take a big step towards your digital transformation goals.

The class of software systems that have come into being in recent years to address this important cycle is generally referred to as Procure-to-Pay or Purchase-to-Pay software systems – P2P systems for short.

P2P systems consist of a number essential components:

Procurement

Take your
purchasing
to the next
level

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Budget
Management

Make smarter
decisions based on
real-time budget
information

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Accounts Payable
Automation

Future-proof
Accounts Payable,
paper- and
resource-free

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Payments

Additional financial
benefits, cash generation
and great supplier
relationships

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Find out why P2P is the centrepiece to the Source-to-Pay process and how it can enable value across it all:

This guide makes the case that the route to maximum agility across Source-to-Pay sits with P2P as the ‘strategic linchpin’ - covering the key objectives in finance transformational projects:

Visibility and control of cost against budgets.
Visibility of spend through commitment account.
Better cashflow management.
Maximum efficiency of spend management processes.
Effective use of employee time.
Optimised invoice processing.
Maximising the value created by procurement.
Minimising fraud and risk across the supply-chain.

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Transforming P2P into a strategic spend management linchpin

With these components integrated into a single P2P software system, the entire process becomes automated, collaborative and streamlined:

Requisitioning, approval, ordering and receiving, while preventing unauthorised purchases and maintain control.

Real-time insight into budgets with clear dashboards and reports for complete budget control.

Automated invoice registration, validation, matching and payment approval for PO and non-PO invoices.

How to achieve an effective, agile and automated P2P process

A good P2P software solution will provide automation - an electronic system that allows employees throughout the company to browse supplier sources such as catalogues and websites online to find, then purchase or request, the item or service they need from an approved supplier.

The purchase request will be compared to corporate rules based on who is making the request, the cost, the spend category, and other criteria. For approval it will electronically route the request to the right manager. POs will automatically be placed for approved requests. When the invoice arrives, it will be electronically matched against what was ordered and received, and against applicable contract terms.

The best P2P systems process the great majority of invoices “straight-through”, while automatically initiating workflow-based resolution of any exceptions. Once authorised, invoices are passed to your Accounts Payable function for payment.

Learn how Wigan Council achieved 66% processing cost savings by centralizing its AP function and automating P2P.

Improving your existing P2P processes may seem daunting, but by identifying where saving opportunities lie within your organisation and employing a modular approach to automation, you can focus efforts on where you have the most immediate need.

Download this guide for a practical way to get started in the pursuit of P2P process optimization.