Procure to Pay: The Process and Benefits for Your Business

What is Procure to Pay?

Procure to Pay (P2P) is the process of managing the acquisition of goods and services from a vendor, to the processing of the invoice, and finally to paying the vendor. In simple terms, it’s the entire process, from identifying a need, to getting the items delivered, and then paying for them.

P2P is not to be confused with peer to peer. Peer to peer (P2P) refers to a distributed network architecture where individual computers, called “peers,” communicate and share resources directly with each other, without the need for a centralized central server or authority. This concept is often associated with file-sharing systems, where users can share files directly with each other, without the need for a central repository. P2P can also refer to peer-to-peer lending, where individuals lend money to each other without involving traditional financial institutions. P2P, in this context, is strictly about procuring goods.

The P2P process is complex and requires a coordinated effort from different departments such as procurement, accounts payable, and finance. When done manually, P2P can take up a significant amount of time and resources. This is where automated P2P solutions come in. Automated P2P solutions streamline the process, increase efficiency, and reduce costs.

In this blog, we’ll dive deeper into the P2P process, the benefits of implementing an automated P2P solution, and what to look for in a P2P solution.

Why is P2P Used?

Businesses use the procure to pay process to streamline their purchasing and payment processes. The procurement process often starts with the requisition of goods or services, followed by procurement and receiving, and ends with payment to suppliers. P2P provides a clear audit trail of all transactions and ensures that the organization is only paying for goods or services that have been received and approved. By automating the P2P process, businesses can improve their efficiency, reduce costs, and minimize errors and fraud. P2P also helps businesses to maintain accurate records and ensures that all procurement activities are in compliance with the organization’s policies and regulations.

How Does the P2P Process Work?

The P2P process typically consists of five stages. The process can be completely manual, partially automated, or fully automated. Below, we detail the entire process:

1. Identify the Need

The process begins with identifying the need for goods or services. These needs could be as simple as office supplies to raw materials for the manufacturing of goods/services. The team or teams that has identified the need create a statement of work (SOW) to outline the project scope, relevant stakeholders approve the SOW and procurement needs are outlined for requisition.

2. Raise a Requisition

Once the need is identified, a requisition is raised by the department to notify the procurement team. This is done through a purchase requisition form. In a manual process, these forms are often hand written. This purchase requisitions form tells the procurement team the details of the order. The requisition is then reviewed for accuracy before going to the procurement team to create a purchase order.

3. Purchase Order (PO)

The procurement team evaluates the requisition and decides whether to issue a PO to the vendor. If a PO is issued, it outlines the details of the order, such as quantity, price, delivery date, and payment terms. Purchase requests are then sent to vendors for fulfillment.

4. Receiving the Order

Once the vendor delivers the goods or services, the receiving department checks to make sure that they match the PO in quantity and quality and generates a goods receipt (GR). The goods are then entered into the ERP software for inventory. If goods are damaged or do not match the purchase request, the vendor performance is flagged for future reference and invoice corrections.

5. Invoice and Payment

Once the GR is approved, verification of the order begins before being sent for payment. This process of transaction cross-referencing can be:

  1. Two-way: Purchase order and goods receipt

  2. Three-way: Purchase order, goods receipt, and vendor invoice

  3. Four-way: Requisition request, purchase order, goods receipt, and vendor invoice

If no errors are found, the invoice is sent to the finance team to accounts payable for vendor payment according to the PO specifications. If there are errors, such as damaged goods or lack of quality, the invoice is returned to the vendor for corrections.

Automated Procure to Pay Software has Several Benefits, Including:

1. Improved Efficiency

Automated P2P solutions reduce the manual effort required for processing purchase orders and invoices. This reduces the time and resources required for P2P, allowing employees to focus on other tasks.

2. Increased Accuracy

Manual processing of P2P can result in errors such as duplicate invoices, incorrect data entry, and delayed payments. Automated solutions reduce the chances of errors by making sure data is entered correctly and removes manual tasks.

3. Obtain Complete Visibility

Automated P2P solutions provide real-time visibility into the status of purchase orders, invoices, contract compliance, and payments. This enables better decision making and helps to identify potential issues before they become problems.

4. Cost Savings

Automated procurement management can reduce the costs associated with P2P by reducing the number of manual tasks required, reducing the likelihood of errors, and enabling better vendor management.

What to Look for in procure to pay software

When looking for procure to pay software, consider the following factors:

1. Integration

The P2P solution should integrate with your existing ERP or accounting system.

2. Customization

The solution should be customizable to meet your business needs and processes.

3. Automation

Look for a solution that offers end-to-end automation of the P2P process, from requisition to payment.

4. Visibility

Look for a solution that offers end-to-end automation of the P2P process, from requisition to payment.

5. Security

Look for a solution that offers robust security features to protect your data and prevent fraud.

6. Payment processing

The payment process should be smart enough to recognize special paying conditions, early payment discounts, and, most importantly, pay invoices on time. Companies that invest in automated procure to pay software can cut late payments by as much as 75%.


In conclusion, procure-to-pay is a critical process for businesses of all sizes. It is important to have an efficient and streamlined system in place to manage this process, which can save time, reduce errors, and improve cost management. By implementing a robust procure to pay system, businesses can ensure they are making the most of their financial resources and improving their overall financial health. From requisitioning goods and services to paying for them, a well-implemented procure-to-pay process can be a game-changer for businesses looking to optimize their operations and gain a competitive edge in the market.

About ExpenseAnywhere

Headquartered in Pittsburgh, PA, USA with offices on three continents and clients all over the globe, ExpenseAnywhere is a world–class provider of exceptionally powerful, easy–to–use, web–based solutions for travel and expense management, supplier invoice processing, and p-card / prepaid card management.

To learn more about ExpenseAnywhere’s state-of-the-art corporate spend management solutions, visit us at or call us at 412-858-1111.