Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Procure-To-Pay — Definition, Process Flow + Examples

What is a Procure-To-Pay?

Procure-To-Pay (P2P) is a process that manages everything from selecting goods and services to paying for them, combining purchasing steps with administrative tasks. It streamlines and automates transactions, vendor relationships, and compliance, covering key stages like selection, receiving, enforcement, and payment. P2P software simplifies these processes, reduces errors, saves time, and strengthens control over suppliers, contracts, and accounts payable. Ultimately, it helps organizations buy efficiently from preferred suppliers while maximizing savings and value from sourcing.

The 9 Steps of the Procure-To-Pay Process 

For the most basic procure-to-pay process flow, the entire process flows like the following:

1. Identifying Needs

The first step of the procure-to-pay process is to check and define the business requirements with the help of cross-functional stakeholders. Once there is a valid need, procurement teams can then sketch out the specifications needed for the goods/products and terms of reference for the service.

Tips for Improving Needs Assessment

To enhance this step, companies can implement regular cross-departmental meetings to clarify requirements and anticipate future demand. Using data analytics tools can help forecast needs more accurately and reduce over- or under-ordering. Clear documentation of business requirements ensures that specifications are precise and reduces confusion later in the process.

2. Creating Requisitions

Once the specifications are created, a formal purchase requisition is created. The requester submits the filled-out purchase requisition forms after making sure that all necessary administrative requirements are met. 

Tips for Streamline Requisition Creation

Requisition creation can be improved by adopting digital forms or automated workflow software to reduce errors and speed up submissions. Standardized templates and checklists can ensure all necessary details are included on the first try. Training employees on how to fill out requisitions correctly also minimizes back-and-forth corrections.

3. Purchase Requisition Approval

The submitted purchase requisitions are then reviewed by the procurement department heads for approval. These guys can either approve or reject the purchase requisition once the need is evaluated and the budget is also verified. Any incomplete requisition forms are brought back to their creator for re-editing.

Tips for Accelerating the Approval Process

The approval process can be enhanced by implementing automated approval workflows based on budget limits and department hierarchy. Real-time notifications and dashboards help managers respond faster to requisitions. Clear criteria for approval and rejection reduce ambiguity and the need to send requisitions back for revisions.

4. Creating a spot-buy/PO

If the requested goods are items that have certain characteristics, like unmanaged category buys, one-time unique purchases, or low-value commodities, then buying on the spot can be done.

Tips for Optimizing Spot Purchases

Spot purchases can be improved by maintaining a pre-approved list of vendors for one-time or low-value buys. Using automated tools to compare prices quickly ensures cost efficiency. Proper documentation of the purchase rationale reduces risks and helps with auditing later.

5. Purchase order approval

Purchase orders are now sent through an approval loop to ensure the legitimacy and accuracy of specifications. Approved purchase orders are then dispatched to vendors. After reviewing the purchase order, vendors can either approve, reject, or start a negotiation. When an officer approves a purchase order, a legally binding contract is activated.

Tips for Streamlining PO Approval

Implementing automated approval workflows based on predefined thresholds can speed up the process. Clear communication of approval criteria helps reduce errors and misunderstandings with suppliers. Digital tracking systems provide real-time visibility into the status of each purchase order.

6. Goods receipt

Once the supplier delivers the promised goods/services, the buyer inspects the delivered products or services to ensure that they comply with the contract terms. The goods receipt is then approved or rejected based on the standards specified in the purchasing contract or purchase order.

Tips for Enhancing Inspection Accuracy

Goods receipt can be improved by using barcode scanning or RFID systems to verify deliveries automatically. Standardized inspection checklists reduce human error and ensure compliance with contract terms. Integrating goods receipt data into ERP systems speeds up downstream processes like invoice matching and inventory updates.

7. Supplier performance

Based on the data obtained from the previous step, the supplier performance is evaluated. A number of factors like quality, on-time delivery, service, contract compliance, responsiveness, and Total Cost of Ownership (TCO). Non-performance is flagged in existing rosters and information systems for future reference.

Tips for Monitoring Performance Consistently

Regularly tracking supplier KPIs such as quality, delivery, and responsiveness helps identify potential risks early. Supplier scorecards and dashboards allow for quick comparisons and highlight areas for improvement. Sharing performance feedback with suppliers encourages collaboration and continuous improvement.

8. Invoice approval

Once a goods receipt is approved, a three-way match between the purchase order, the vendor invoice, and the receipt of the goods is performed. If there are no discrepancies found, the invoice is approved and forwarded to the finance team for payment disbursement. 

Tips for Automating Three-Way Matching

Automating the three-way match between purchase order, invoice, and goods receipt reduces manual errors and speeds up approvals. Alert systems for discrepancies allow quick resolution before payment. Integrating invoice approval with finance software ensures accurate and timely payment processing.

9. Vendor payment

Upon receiving an approved invoice, the finance team will process payments according to the contract terms. Any contract changes or reviews of liquidated financial security will be taken into account. A payment made to a supplier will fall into one of the following five types: advance, partial, progress or installment, final, and holdback/retention payments.

Tips for Optimizing Payment Processes

Vendor payments can be improved by automating payment scheduling according to contract terms. Implementing multiple payment methods and tracking tools ensures efficiency and reduces late-payment risks. Periodic reviews of payment performance can strengthen supplier relationships and enhance cash flow management.

3 Real-Life Examples of Procure-To-Pay

1. Sysco Foods — P2P Process Automation

Sysco Foods faced manual processing of tens of thousands of invoices each year, which was slow and labor-intensive. Due to business growth and the need for a scalable solution, Sysco implemented a P2P system that included automated workflows for purchase order approvals (PO), goods receipt (GRN), and intelligent invoice capture, integrated with their ERP (MS Dynamics AX).

The solution provided a centralized view of the entire P2P cycle, increased productivity and financial efficiency, and enabled easier dispute management and budget control. The system replaced paper-based purchase books and allowed purchase orders and invoices to be approved remotely, accelerating workflow across the organization.

2. Kimly Construction (Singapore) — Digital P2P Transformation

Kimly Construction, a major construction company in Singapore, decided to automate its Procure-to-Pay process using the Doxa Connex platform to accelerate digitalization. Automation eliminated manual steps in processing payments to suppliers and subcontractors, allowing higher transaction volumes at lower labor costs.

Through the digital system, Kimly achieved significantly higher productivity and efficiency, reduced the labor hours needed for payment processing, and enabled paperless trade finance submissions with partner banks. Time savings reached approximately 30% in payment processing, freeing up resources for strategic activities.

3. Blue Star (India) — AI-Driven P2P Optimization

The Indian company Blue Star, known for refrigeration and air-conditioning equipment, transformed its P2P process using an AI-driven financial solution. Before modernization, the company struggled with complex invoice management, multiple approval flows, and a high volume of manual tasks. Datamatics provided AI and RPA integration for automated invoice processing, three-way matching, and centralized tracking.

The implementation resulted in significant improvements: over 70% of invoices are processed through the supplier portal, and invoice processing time was reduced by 33%. The system enabled better financial management, increased transparency, and improved supplier relationships through faster and more accurate payments. 

Top 10 Procure-To-Pay Tools

1. SAP Ariba

SAP Ariba is one of the most well-known enterprise P2P solutions and is part of SAP’s spend management portfolio. The platform automates procurement, supplier management, contracts, purchase orders, and invoices in a single system. It is strong in global implementations with a large user base and deep ERP integrations. SAP Ariba provides comprehensive analytics and reporting to track spend and supplier performance.

Price:

• The pricing is not publicly available and requires contacting SAP for a custom quote. Costs vary based on company size, number of users, and implementation scope.

2. Coupa

Coupa is a cloud-based platform focused on managing total spend and P2P processes with strong budgeting controls and spend analytics. It is used by mid-sized and large enterprises that want end-to-end automation of procurement, invoicing, and payments. Coupa integrates with ERP systems and provides real-time insights into spending.

Price:

• Pricing is customized and not publicly listed. Companies need to contact Coupa for a quote, depending on the modules and the number of users.

3 Precoro

Precoro is designed for mid-sized companies seeking quick implementation and clear spend visibility. The platform covers purchase orders, approvals, budgeting, and invoice tracking through an intuitive interface.

Price:

• Pricing starts at approximately $35 per user per month, making it suitable for SMBs transitioning from manual processes to automated P2P.

4. Procurify

Procurify focuses on easy purchase management and budget visibility through a centralized dashboard. The platform allows creating purchase orders, approvals, and basic invoice automation in a cloud environment.

Price:

• Typical pricing starts at around $2,000 per month for basic packages targeting mid-sized businesses.

5. ProcureDesk

ProcureDesk includes a P2P suite with real-time spend visibility, mobile apps, and budget controls suitable for SMBs. The platform supports over 200 supplier catalogs, automates PO creation, and provides three-way invoice matching.

Price:

• Pricing starts at approximately $598 per month, competitive for small and mid-sized teams. 

6. Oracle Procurement Cloud

Oracle Procurement Cloud is part of the Oracle ERP system and provides deep integration with other financial modules. It automates procurement, contracts, purchase orders, and invoices with analytics and AI-powered functions.

Price:

• Standard pricing for some modules is around $650 per user per month, while full licensing depends on module selection and implementation scale.

7. Spendflo

Spendflo combines automation with AI-driven cost and contract management. The platform provides centralized SaaS spend control, PO automation, and ERP integrations.

Price:

• Exact pricing is not publicly listed and usually requires contacting Spendflo for a quote based on features and the number of users.

8. PRM360

PRM360 is a highly-rated P2P software with strong workflow automation and customization for complex processes. It offers features from purchase order creation to invoice approvals with analytics and integrations.

Price:

• Pricing is not public and must be obtained directly from PRM360 sales.

9. Basware

Basware is an enterprise P2P and e-invoicing platform that excels in high-volume and international compliance environments. It focuses on automated invoice matching and payments, and ERP integrations.

Price:

• Pricing is customized and negotiated individually based on company size and usage. 

10. GEP SMART

GEP SMART is a P2P and source-to-pay platform with strong analytics, supplier management, and compliance features. It offers end-to-end automation with AI capabilities for global enterprises.

Price:

• Pricing is custom and depends on organization size and selected modules; a sales contact is required for a quote.

Conclusion

The Procure-to-Pay (P2P) process is essential for modern organizations, as it streamlines purchasing, supplier management, and payment operations. By automating key steps from requisition to payment, companies can reduce errors, save time, and improve financial control. P2P systems also ensure compliance and standardization across all procurement activities.

Implementing P2P software helps organizations gain visibility into spending, track supplier performance, and optimize workflows. Real-life examples from companies like Sysco, Kimly Construction, and Blue Star demonstrate measurable benefits such as faster invoice processing, higher efficiency, and improved supplier relationships. Automation and AI integration further enhance accuracy and decision-making throughout the process.

Overall, P2P solutions enable businesses to maximize value from sourcing and strengthen supplier collaboration. They reduce manual workloads and support strategic decision-making in procurement. As a result, companies can achieve both operational efficiency and financial savings while maintaining strong compliance and control.