Procure-to-Pay (P2P)
A comprehensive, end-to-end process that spans sourcing a supplier, raising a purchase order, receiving goods or services, matching the supplier’s invoice, and paying it—creating one auditable chain from initial demand to cash leaving the bank.
Key Facts
Alternate names: purchase-to-pay, PO-to-invoice, P2P cycle
Process stages: requisition / intake → purchase order (PO) → goods receipt / service entry → three-way or two-way match → invoice approval → payment run → reporting
Key stakeholders: requester, procurement, receiving/warehouse, accounts payable (AP), treasury, budget owners
Core technologies: e-procurement suites (Coupa, SAP Ariba, Oracle Fusion), AP automation, OCR/EDI e-invoicing, supplier portals, ERP / GL
Why It Matters
Controls spend – Every purchase flows through policy, budget, and preferred-vendor checks before cash is committed.
Boosts efficiency – Automation replaces paper POs, manual invoice entry, and email approvals, cutting processing cost per invoice by up to 80 %.
Improves supplier relationships – Accurate, on-time payments strengthen leverage for better pricing and ensure supply-chain resilience.
Real-World Examples
Enterprise Pharma
Automated P2P integrates e-catalogues with punch-out to preferred suppliers. Three-way match accuracy hits 98 % and average requisition-to-receipt time falls from 14 to 5 days, critical for R&D project timelines.
High-Growth SaaS Company
Implements cloud P2P with Slack approvals. AP processing cost drops from $9.10 to $2.20 per invoice, freeing finance head-count to focus on revenue operations instead of data entry.
Diagram / Visual (optional)
Linear flow: Intake ▶ PO ▶ Receipt ▶ Match ▶ Approve ▶ Pay ▶ Reconcile — with automated controls at each arrow.
Related Terms
Intake-to-Procure
Three-Way Match
Accounts Payable Automation
Budget Control
Frequently Asked Questions
Q: What’s the difference between procure-to-pay and source-to-contract?
A: S2C covers supplier identification, negotiation, and contract creation before a PO exists; P2P handles everything after demand is approved through to payment.
Q: Is three-way match always required?
A: Not necessarily—low-risk, low-value purchases often use two-way match (PO-to-invoice) to speed processing; policy should define thresholds.
Q: How can we measure P2P success?
A: Track cycle-time from requisition to payment, first-pass match rate, percentage of spend under PO, early-payment discount capture, and supplier satisfaction scores.
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