• By ProcureDesk
  • May 19,2023
  • 10 min read


Procure-to-pay (P2P) is a critical process for your organization’s supply chain, which may be a tough and challenging process to manage.

However, with the advent of e-procurement and AP automation software, the procure-to-pay process has been more streamlined and efficient now than ever!

In this resource, you will learn what procure-to-pay is and the various benefits and best practices associated with e-procurement and AP automation that can help your business. You will also learn how using accounting software can help you streamline your procurement cycle.

Whether you’re an established business or just looking to improve your procurement process, this resource filled with valuable insights and actionable tips is for you!


What Is Procure-To-Pay In Simple Words?

Procure-to-pay describes the purchasing process that starts with placing orders and ends with recording transactions in an accounting system. This process involves everything from submitting a purchase request to the payment process until the transaction is tracked.

Procure-to-pay aims to streamline the purchasing process by integrating purchasing and account payables system to make it more efficient to manage the processing of purchasing goods, tracking orders, receiving the products, and paying for them.

Procure-to-pay is a critical process for business owners like you to ensure that you are purchasing goods effectively while properly accounting for all your purchases.

How Does Procure-To-Pay Work?

Your Procure-To-Pay cycle involves procurement, receiving, and accounts payable workflows that integrate, ensuring a smooth transaction from start to end.

Using automation software plays a critical role in the success of your P2P process. Your software is responsible for automating manual processes, minimizing human error, improving efficiency, and reducing the risk of fraud.

Automation for your organization can ensure that your procurement, receiving, and accounts payable workflows are well-integrated and streamlined. Additionally, automation also helps you reduce your processing time, lower your costs, and increase accuracy.

Why is Procure-To Pay Solutions Important

Your procure-to-pay process is integral to your procurement process, ensuring that your business maintains an efficient and effective process.

There are several benefits implementing a procure-to-pay process can bring your business. One of the most significant benefits it brings is increased efficiency.

Transparency, automation, and streamlining of all procurement activities through a P2P system result in clear visibility of progress and a greater ability to manage the process.

Another significant advantage that P2P can bring is cost savings. By implementing an efficient and effective procurement process, your business can significantly reduce your overall costs, especially when purchasing foods and services.

Additionally, your P2P process also enables you to have better supplier relationships. By establishing clear and transparent relationships with suppliers, your business can negotiate better terms, leverage bulk purchasing, and even get better pricing for your product purchases.

The procure-to-pay process is important to ensure your procurement activities are managed from beginning to end.

Procure-To-Pay vs. Purchase-To-Pay

One thing you should know is that procure-to-pay and purchase-to-pay are that they are two commonly used terms in the procurement world.

Definition Of Procure-To-Pay

Here is the definition of procure-to-pay:

  • Procure-to-pay refers to the entire process of acquiring goods or services.
  • Covers the entire end-to-end process of purchasing.
  • This process starts by identifying the need for goods or services, selecting a supplier, creating a purchase order, receiving goods or services, matching invoices, and making payments.
  • This process ensures that your business can procure goods and services as efficiently and cost-effectively as possible.

Definition Of Purchase-To-Pay

Here is the definition of purchase-to-pay:

  • A subset process of the procure-to-pay process focuses solely on purchasing goods or services.
  • Described as a specific step within a larger procure-to-pay process.
  • It encompasses all activities related to purchasing, from identifying a need for an item to obtaining quotes, issuing purchase orders, and managing contracts.
  • It does not cover later stages of the purchasing process, such as creating and approving invoices or making payments.

What Is The Procure-To-Pay Process?

Several steps are involved in the P2P process. Let’s go over them one by one.

Step 1: The first step is supply management, where your company identifies your needs and decides on the goods and services required.

Step 2: This step involves vendor selection, where your organization’s procurement team identifies and selects your preferred suppliers.

Step 3: A purchase order is created once the vendor is finalized. This contains all the necessary information your organization needs to complete the transaction.

Step 4: The next step is invoice reconciliation after receiving and verifying the goods or services. In this step, the invoice is matched against the purchase order and receiving information. Any discrepancies are handled through the exception-handling process.

Step 5: The final step involves the accounts payable team, where the invoice is processed, and the payment is made to the vendor.

What Are The Steps To Procure To Pay Process?

As you already know, the P2P cycle is a key part of your business operation involving purchasing goods or services.

1. The process begins with a requisition order, a request to procure goods or services. This requisition order will be submitted by someone within your company who needs the goods or services for a specific purpose.

2. Once the requisition order is approved, your procurement team can move on to creating a purchase order (PO.) The PO specifies the quantity, type, and price of the goods or services to be purchased. This also includes the expected time delivery date and payment terms.

3. After creating the PO during your supplier engagement, your supplier typically sends an advance shipping notice (ASN) and an order confirmation to confirm the order details. Your ASN details the shipment’s contents, while your order confirmation confirms that your supplier has received the PO and is starting the processing of the order.

4. Once your goods and services are received, your payment process begins. This can involve arranging for payment through the company’s accounting system and recording the payment in the system for future reference.

Additional steps may be included throughout the entire procure-to-pay process to ensure high-quality goods or services. In addition, this also aims to prevent any errors or issues that may affect the company’s bottom line.

These key steps may include purchase approval processes, inspection, and inventory management.

By understanding the importance of your procure-to-pay process and following the correct basic steps, your business can ensure that your procurement operation runs smoothly and promptly.

What Are The Range Of Benefits Brought By The Procure-To-Pay Process?

Having a streamlined P2P process provides your company and even your vendors with several benefits. Using automation, your procurement, receiving, and accounts payable workflows can be managed efficiently and accurately while reducing the risks of late payments or errors. P2P solutions also bring your business a more integrated solution while handling your entire business transactions.

This can improve relationships with suppliers who benefit from timely payments, improved communication, and clear vendor performance metrics.

Additionally, a streamlined process enables cost savings, faster turnaround times, and improved cash flow, making the P2P process an essential part of any organization’s supply chain management.

Here is the range of benefits of a P2P approach in more detail:

1. Streamlined procurement process: P2P software automates the procurement process, from requisition to payment, eliminating manual errors and reducing cycle times due to manual process. This automation leads to greater efficiency and cost savings.

2. Greater visibility: P2P software provides real-time visibility into procurement activities, allowing your business to monitor spending, identify cost-saving opportunities, and make data-driven decisions.

3. Managing supplier relationships: P2P software helps your business manage your supplier relationships more effectively by tracking supplier performance, reducing maverick spending, and negotiating better contracts.

4. Strengthening supplier relationship management: P2P software enables buyers and suppliers to collaborate more effectively by sharing information and documents in real-time, improving communication, and building stronger relationships.

5. Optimizing financial decision-making: P2P software provides accurate and timely financial data, allowing your business to make informed decisions about spending, budgets, and investments.

6. Data collection: P2P software collects data on procurement activities, providing insights into trends, patterns, and opportunities for improvement. This data can be used to optimize procurement processes, reduce costs, and improve overall procurement performance.

How Does E-Procurement System Differ From Traditional Procurement Methods?

E-procurement uses technology and automation to streamline the entire P2P process for your business. Automation solutions play a critical role in your procure-to-process, facilitating purchasing your goods and services from your suppliers. Thus, helping your purchasing departments become more efficient during purchasing processes.

Traditional procurement methods involve manual processing, like creating purchase orders, sending them to suppliers, and receiving and processing supplier invoices.

On the other hand, P2P Automation brought by E-procurement software easily automates these processes and provides your business with an end-to-end solution for your procurement.

Here are some of the key benefits of implementing an e-procurement software system for your business:

  • Improved efficiency and productivity
  • Convenience in viewing contract terms and other internal requests
  • Reduced costs and errors during invoice matching
  • Enhanced visibility and control over the procurement process
  • Better compliance with procurement policies and regulations
  • Increased supplier collaboration
  • Assist in automating purchasing controls such as approval workflows, purchase order matching, and invoice automation processing.
  • It gives you a dashboard where you can view the summary for your vendor payment and even give you access to a supplier portal.
  • It has a wide range of specialized features can help you with spend analysis, supplier management, contract management, purchase order creation and management, e-invoicing, and inventory management. Thus, providing a more efficient procure process.

What Type Of Challenges Can E-Procurement Solve?

Always remember that even the most organized procurement teams can still be at risk of facing issues and other complications regarding the procurement lifecycle. But with E-procurement and AP Automation, it becomes easier to solve these challenges.

Here are some of the common procurement problems that can be solved by e-procurement and AP automation software:

1. Tedious processes: Manual processes can be very time-consuming and lead you to be more prone to errors. E-procurement and AP automation software can help your business streamline processes, making it faster and more accurate as a form of payment solution.

2. Running numbers: It is common for procurement teams to often deal with large amounts of data. Using e-procurement and AP automation software can help you analyze and organize your data to ensure it is easier to manage.

3. Compelling incentives to guide actions: Oftentimes, procurement teams incentivize happy suppliers to offer better deals. Using e-procurement and AP automation software can help your business provide real-time information on supplier performance and offer incentives to encourage better performance.

4. Supporting the entire procurement process: P2P software supports the entire procurement to the payment process, starting with the creation of purchase requisitions, to the approval of purchase orders, through the receipt of goods and services, to the processing of supplier invoices, and finally, the issuance of electronic payments. By automating these processes, P2P software can eliminate manual errors, reduce cycle times, and improve spending and supplier performance visibility.

5. Accountability: E-procurement and AP automation software can help track procurement activities and ensure everyone involved is accountable for their actions.

6. Customized solutions: E-procurement and AP automation software can be customized to meet the unique needs of each business, helping to solve specific procurement problems

Tips To Optimize Your E-Procurement And AP Automation For Your Procure-To-Pay Process

E-procurement and AP automation can be great tools to help you optimize your procurement process. However, you must optimize your e-procurement and AP automation tools to make the most out of them.

Here is how you can do it:

1. Customized solutions: Look for software that can be tailored to meet your specific needs. This will help you ensure you can use the most efficient and effective tools that will fit your business and bring you a better purchase order system.

2. Understand your costs: You must understand the costs associated with e-procurement and AP automation. While these tools can offer significant cost savings, your business must know the costs required to implement and maintain your software.

3. Seamless integration: Ensure your software integrates seamlessly with your existing systems, minimizing disruptions and reducing your risk of error.

4. Prioritize incentives: To encourage your staff to adopt new systems, make sure that you prioritize incentives like reducing workload, increasing efficiency, and improving accuracy.

5. Accountability and record-keeping: Your E-procurement and AP automation offer improved accountability and accurate record-keeping, ensuring that you comply with regulations while reducing the risk of fraud.

6. Streamlined purchasing controls: Make sure you utilize software that will help you automate your purchasing controls, allowing you to build a streamlined process flow for faster decision-making.

7. Thorough tax assistance: Use software that has built-in robust tax assistance features, such as automated tax calculations and reporting, reducing the risk of errors and compliance issues.

By adopting these best practices for choosing your very own software solutions and payable processes, your business can maximize the benefits of e-procurement and AP automation for your procurement department, including increased efficiency, reduced costs, and even improved accuracy.


Your procure-to-pay process is critical to ensure your organization’s supply chain is successful. Fortunately, with the rise of e-procurement and AP automation tools, your business processes have become much easier, helping you improve your bottom line.

If your organization’s finance team is ready to explore automation software that can help you streamline the procure-to-pay processes for your business and improve your payable systems, schedule a demo call with our team from ProcureDesk today!