What is procure-to-pay (P2P) and how does it affect your procurement campaigns? What is the role of a procure-to-pay portal in the P2P cycle?

Procure-to-pay, also known as purchase-to-pay (P2P) is a fundamental procurement process designed to source and pay for the raw materials and or services needed by an enterprise to produce finished goods.

There are a number of steps within the procure-to-pay process.

Procurement teams that are interested in creating value, improving sourcing efficiency and mitigating spend understand the importance of P2P adoption in their own efforts.

Procure to Pay Defined

What is a procure-to-pay cycle?

TechTarget defines the procure-to-pay process as one that involves, “requisitioning, purchasing, receiving, paying for and accounting for goods and services.”

The Chartered Institute of Procurement & Supply (CIPS) adds that the P2P process, “underpins many sub-processes from sourcing and negotiating terms, ordering, receipting and payment, through to contract and relationship management.”

The P2P process is ideal for buyers keen on optimal sourcing. Furthermore, it is preferred for use with suppliers that are already on familiar terms with the buyer and their procurement system.

As a process, P2P consists of several phases. Below are the steps that complete the P2P cycle.

The Complete Procure-to-Pay Steps

The following steps outline the procure-to-pay process. However, it is not unheard of for enterprises to further break down each of these steps into sub-stages. 

Here’s a graphic that can help you visualize the P2P cycle:

Step 1: Placement of Requisition Orders

The procure-to-pay process begins with the placing of orders. Internal requests from the various departments within the enterprise are made to the procurement and sourcing teams. This application or demand for resources is what is deemed as a requisition order.

Orders can be placed through the procure-to-pay portal or using other functions within a company’s ERP system. Having a centralized P2P platform will assist in keeping track of orders.

Step 2: Vendor/Supplier Selection

Before requisitions are processed and sent to the vendor, they must first be approved by the Chief Procurement Officer. Following approval, qualified vendors who have already been screened and vetted during the source-to-settle stage can then be presented with these requisitions.

It is these suppliers who will be contacted to fulfill the requisitions. They are generally already well acquainted with the buyer’s procurement systems.

Step 3: Purchase Order Issuance

With approval received, a purchase order (PO) is created. A purchase order is simply a “buyer’s request to a seller to order goods.”  The order only becomes valid and active when the seller accepts the terms and conditions of the PO.

A purchase order is different from an invoice. Where an invoice details the transactions that have been completed, a PO outlines the product quantities, prices, and various other metrics that will have already been negotiated.

Step 4: Receipt of Goods

The vendor then takes the PO and fulfills it. They deliver the requested products to the buyer. The goods received are acknowledged, inspected, and entered into the inventory.

Documents that often accompany the receipt of goods include the advanced shipping notice (ASN) as well as the order confirmation.

Step 5: Issuance of Invoice by Vendor

Following the order confirmation, the supplier furnishes the buyer with an invoice. The CPO must reconcile the invoice before payment can be processed on the buyer’s side.

Reconciliation is the business of checking that what was received is what was ordered in the first place. As soon as this has been confirmed payment can be issued from the buyer’s side.  

Step 6: Accounts Payable

The concluding step in the procure-to-pay cycle involves payment of the invoice by the buyer. This is generally cleared by the accounting department in an enterprise.


The P2P process can be complex. Hence the need for an end-to-end procure-to-pay portal that facilitates automation and integration of each of the aforementioned steps.

As a trusted and leading procurement software vendor, ProcurePort provides robust solutions that simplify the process.

One of the core advantages of integrated procure-to-pay portal software is its innate ability to consolidate data. Furthermore, such technology can improve spend visibility.

ProcurePort is one of the leading providers of cutting-edge innovative procurement solutions including spend analysis technologies and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.

If you would like to discuss procure-to-pay software with a consultant, or to schedule a demo, contact us today.