P2P Process Flow
What Is the P2P Process Flow?
The procure-to-pay process flow, supported by effective purchasing software, also known as the P2P process flow, delineates the steps companies undertake to purchase goods and services. The sequence commences when a company identifies a need for a good or service and concludes when the accounts payable department finalizes payments for the received goods.
P2P can be a manual process for small companies. However, large companies building complex products usually automate their P2P process flow with procurement solutions.
The term "procure-to-pay process flow" probably doesn't mean much to most people. But if you're a director of engineering at a hardware or robotics startup, it's crucial to understand how this process works. After all, the procure-to-pay process flow allows your company to get the materials and supplies it needs to build its groundbreaking products.
Failure to understand the P2P process flow can lead to problems such as missed deadlines, cost overruns, and defective products. Unfortunately, the procure-to-pay process can be complex and confusing.
That's why we've put together this guide. In it, we'll explain the procure-to-pay process flow and how it works. Continue reading to find out more about the P2P process flow.
The Steps in the P2P Process Flow
Now that we've answered the question "what is the P2P process flow?" It's time to take a closer look at the individual steps involved in this process. Here's a breakdown of the steps in the P2P process flow:
Creating a Purchase Requisition
A purchase requisition is a formal purchase request that a company creates when it needs to purchase a good or service. The purchase requisition should include:
- A description of the goods or services required
- The quantity required
- The estimated cost
- The proposed supplier
- The reason for the purchase
- The delivery date required
Your company can create requisitions for different types of procurement, including consignments and standard purchases.
