Procure-to-Pay (P2P) is the process of requisitioning, purchasing, receiving, paying for, and accounting for goods and services. It is also known as purchase-to-pay, eProcurement, or req-to-cheque. The P2P process involves various stages, from identifying a need for goods or services to concluding with the payment to the suppliers. The P2P cycle describes the steps that a company must take to procure the items and pay the appropriate remittance to the supplier, less any discounts and adjustments. Although simple in theory, the modern P2P cycle for enterprise-level businesses is a highly complex undertaking with many moving parts. As businesses grow and operate at a greater scale, P2P and related accounts payable processes must transition from simple paper-based workflows into sprawling efforts that often demand automation and computer aids.

The P2P process is not designed to speed up vendor payment because this is not in the interests of companies who want to hold on to their cash for as long as possible. Instead, it is designed to improve efficiency and financial controls. Digitalizing the procurement process with P2P software solutions can strengthen compliance and control among vendors, contracts, regulations, buyers, and accounts payable. By using SAP as a part of your P2P process flow, you can electronically integrate with vendor systems and fully automate a large portion of purchasing. Using the SAP P2P process ensures efficient data capture and allows your business to conduct analytical operations to identify opportunities for savings and improvements.

The entire P2P process consists of many individual processes that take place across different parts of the organization and involve multiple people. This introduces complexity and, at times, confusion, especially when the process is manual and paper-based. Organizations that use disparate systems often find they lack access to information across the P2P cycle, and even in the cases when information is available, it might be inaccurate. This leads to a lack of visibility across suppliers and spend and impacts the ability to make strategic business decisions. Implementing an automated procure-to-pay solution, ensuring the P2P process is transparent and traceable at all times, increasing collaboration between procurement and AP, optimizing supplier engagement and satisfaction, and developing measurable goals and tracking performance are some of the best practices to improve efficiency and effectiveness.