What is Procure to Pay?
Procure to Pay, often abbreviated as P2P, is the process related to the procurement of goods and services within an organization. It is the reverse of the Order to Cash process. In this blog, we explain exactly what Procure to Pay means, the steps involved, and why this process is critical to business operations.
What does Procure to Pay mean?
Procure to Pay describes the entire process from procuring goods and services to paying the supplier. This process begins with identifying a need for particular goods or services and ends with payment to the supplier after the goods are received and the invoice is verified. The P2P process ensures that organizations obtain needed resources at the right time and at the best price and quality.
What is the Procure to Pay process?
The P2P process involves identifying the goods or services needed, selecting suppliers based on price, quality and delivery terms, and creating a purchase order. After receipt, the goods or services are checked for quality and quantity. Then the invoice is compared with the purchase order and receipts, and payment is made according to the agreed terms.
Why is the Procure to Pay process important?
A well-managed P2P process is essential to an organization's efficiency and financial health. The procurement department plays a critical role in ensuring the availability of needed resources at the best possible price and quality. An effective P2P process can lead to cost savings, improved relationships with suppliers, and a reduction in the risks of inventory shortages or surpluses.
In addition, an efficient P2P process helps improve cash flow and optimize operational processes. By streamlining procurement and payment activities, organizations can better focus on their core business and achieve strategic goals.
Solutions for an efficient Procure to Pay process
Unifiedpost offers several solutions to streamline and improve the P2P process. Here are some of our services:
- E-invoicing: By using electronic invoicing, organizations can process and approve invoices faster. This shortens processing time, reduces administrative burden and allows for faster payment to suppliers.
- Automated approval processes: Automating workflows reduces the time required to obtain approvals, minimizes errors and provides a more efficient approval process.
- Digital signatures and electronically registered mail: Digital signatures and electronically registered shipments allow documents to be signed and sent quickly and securely. This speeds up the approval process and increases legal certainty.
Curious about more?
Contact us today to discover Unifiedpost's solutions that can simplify and speed up your procurement processes.