Procure-to-pay (P2P) is the process of integrating purchasing and accounts payable systems to create greater efficiencies. It is the full cycle of actions and events that a business engages in when they require goods or services from an outside supplier. The P2P process involves various stages, from identifying a need for goods or services and concluding with the payment to the suppliers. The main steps in procure-to-pay, starting with the procurement side, include a requisition order, which starts the ordering process during which a purchase order (PO) is created. The next steps involve receiving the good, and common documents created in this phase include an advanced shipping notice (ASN) and order confirmation. The purchase-to-pay system begins with requisitioning, proceeds to procurement, and ends with payment. Requisitioning is the process of formally requesting a service, item, or product with a purchase request form. Procurement happens when the goods or services are received. The system ends when payment is made.
Digitalizing the procurement process with procure-to-pay software solutions can strengthen compliance and control among vendors, contracts, regulations, buyers, and accounts payable. Procure-to-pay software can actively control and improve global spend, consolidate most manual commerce processes to reduce errors, and provide simple and elegant shopping experiences, efficient and effective integration with ERP systems, and improved speed. With so many moving parts and so much information to reconcile on an ongoing basis, businesses require advanced solutions for handling processes involving accounts payable and the P2P cycle. These solutions often come in an ERP platform, such as SAP and specific modules within SAP, combined with additional software designed to reduce error rates and decrease friction.
