Procure-to-pay (P2P)
Also called purchase-to-pay
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is procure-to-pay (P2P)?
Procure-to-pay (P2P) is the full sequence of steps on the purchasing side, from deciding what to buy to paying the supplier. It runs from a reorder suggestion or requisition through the purchase order, receiving and invoice matching to payment, and for a distributor it covers buying inventory as well as supplies and services.
How it works
The control point in the middle is the three-way match between purchase order, receiving record and invoice. Its counterpart on the selling side is order-to-cash.
Procure-to-pay (P2P) example
A buyer approves an ERP reorder suggestion, the PO goes to the supplier, the goods are received a week later, and accounts payable pays the matched invoice 60 days after its date.
Related terms
- Order-to-cash (O2C)Order-to-cash (O2C) is the full sequence of steps from receiving a customer’s order to collecting the payment for it.
- Purchase order (PO)A purchase order (PO) is a buyer’s document ordering specific items, in specific quantities and at stated prices, from a supplier.
- Receiving and putawayReceiving and putaway are the warehouse steps that bring a supplier’s delivery into stock and make it available to sell.
- Three-way matchThree-way match is an accounts payable check that compares a supplier’s invoice with the purchase order and receiving record before the invoice is paid.
