Procure to Pay Process
The procure-to-pay (P2P) process encompasses the entire lifecycle of
procurement, from identifying business needs to supplier selection, purchasing,
invoicing, and final payment. It's a critical function that ensures efficient and
compliant procurement across an organization.
Introduction to P2P
1 Identify Needs
Determine the goods or services required to support business
operations and goals.
2 Source Suppliers
Evaluate and select qualified suppliers that can meet the
organization's needs.
Create Purchase Order
3
Initiate the procurement process by generating a purchase
order for the required items.
Identifying Procurement Needs
1 Demand Forecasting 2 Stakeholder
Collaboration
Analyze historical data and
trends to anticipate future Engage with internal
purchasing requirements. stakeholders to understand
their specific needs and
priorities.
3 Inventory Management
Maintain optimal inventory levels to support operations while
minimizing waste and excess.
Supplier Selection and Onboarding
Supplier Evaluation Contract Negotiation Onboarding Process
Assess suppliers based on criteria such as Negotiate favorable terms and conditions Establish clear communication and
quality, cost, delivery times, and past to secure the best possible deal for the integrate new suppliers into the
performance. organization. procurement workflow.
Purchase Order and Approval
Workflow
1 PO Creation
Generate a purchase order that outlines the requested goods or
services, quantities, and pricing.
Approval Process
2
Implement a structured approval workflow to ensure
compliance and oversight of procurement decisions.
PO Issuance
3
Once approved, the purchase order is sent to the supplier to
initiate the fulfillment process.
Invoice Processing and
Payment
Invoice Matching Payment Approval
Verify that the invoice details Obtain the necessary approvals to
match the corresponding process the payment to the
purchase order and received supplier within the agreed terms.
goods or services.
Payment Execution
Execute the payment through the appropriate channels, such as electronic
funds transfer or check.
Spend Analysis and
Optimization
Data Collection
1 Gather and consolidate procurement data from various sources
to get a comprehensive view of spending.
Spend Analysis
2 Identify patterns, trends, and opportunities for cost savings and
process improvements.
Optimization
3 Implement strategies and measures to optimize procurement
practices and achieve cost savings.
Continuous Improvement and
Compliance
Policy Review
Regularly review and update procurement policies to ensure they align with
organizational goals and regulatory requirements.
Auditing
Conduct periodic audits to identify areas for improvement and ensure
compliance with internal controls and external regulations.
Training
Provide ongoing training and support to procurement staff to enhance their skills
and knowledge.
Thank You
