Purchase-to-pay, often shortened to P2P, is the process that begins when an approved need becomes a purchase requisition or order and ends when the invoice, payment and accounting records are reconciled. It focuses on transactional execution after or alongside supplier selection.
What are the main stages?
- Create and approve the requisition.
- Issue and acknowledge the purchase order.
- Receive and accept goods or services.
- Capture and match the invoice.
- Resolve exceptions and approve payment.
- Execute, reconcile and close the transaction.
How does P2P differ from source-to-pay?
Source-to-pay also includes upstream activities such as spend analysis, sourcing, negotiation and contracting. Purchase-to-pay concentrates on converting an approved requirement or contract into an order and settled financial record.
Which records connect the process?
Link requisition, PO, supplier acknowledgment, receipt or service entry, invoice, approvals, payment instruction, bank or provider reference and ledger entry.
Where do exceptions occur?
Common breaks include missing POs, quantity or price differences, absent receipts, duplicate invoices, changed bank details and incomplete settlement status.
What does good control look like?
Use authorized suppliers, delegated approvals, segregation of duties, matching rules, bank-detail verification, status tracking and reconciliation. Completion requires more than sending a payment instruction.
