Accounting technology / Glossary / Procure-to-pay

What is procure-to-pay?

Definition

Procure-to-pay, or P2P, is the end-to-end process a business follows to buy goods and services and pay for them: raising a request, approving it, issuing a purchase order, receiving the goods, processing the supplier invoice and paying it. It joins procurement, which decides what to buy and from whom, with accounts payable, which pays.

Also calledP2Ppurchase-to-payreq-to-pay

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Starts: Purchase request
Ends: Supplier payment and posting
Key control: Three-way match

How procure-to-pay works

A typical cycle runs: requisition, approval against budget and policy, supplier selection and onboarding, purchase order, goods or service receipt, invoice capture, three-way match, invoice approval, payment run, and posting to the ledger. Controls sit at each step: approval limits, approved supplier lists, segregation of duties between ordering, receiving and paying, and checks on supplier bank details. Weak points are spend that bypasses the process, known as maverick spend, invoices that arrive without a PO, and late approvals that miss payment terms. Measures include the share of spend under PO, cycle time from request to payment, cost per invoice and touchless processing rate. P2P suites cover the whole cycle in one system; other businesses link an intake or procurement tool to separate AP automation and the ERP.

Common questions

What is the difference between procure-to-pay and accounts payable?+

Accounts payable covers the back end: invoices, approval and payment. Procure-to-pay also covers the front end: requests, approvals, supplier choice, purchase orders and receipt.

What is the difference between procure-to-pay and source-to-pay?+

The wider source-to-pay process adds strategic sourcing before the purchase: finding suppliers, running tenders and negotiating contracts. Procure-to-pay starts once a supplier and terms are in place.

What is maverick spend?+

Purchases made outside the agreed process, for example without a purchase order or from a supplier not on the approved list. It weakens budget control and negotiated prices.