What is Procure to Pay Automation

Types of purchase orders

For most businesses, the process of sourcing, buying, and paying for goods and services can be quite lengthy. After all, businesses that have good internal controls require that purchasing managers buy from approved vendors whenever possible. In addition, we must be certain that we actually receive everything that we pay for. Otherwise, there are both opportunities for fraud and potential liabilities in an audit.

In a nutshell, the procure-to-pay process aims to minimize these risks.

What is procure to pay?

Procure to pay, also known as the “req to check” process, streamlined with the help of purchasing software, initiates when a company's purchasing department identifies and approves sources for each required item. Subsequently, a purchase requisition is generated. These requisitions instruct the procurement department to initiate an order for the specified items, which is carried out through the issuance of a purchase order.

Typically, the procure-to-pay process continues with the purchaser of goods tracking them through the supply chain. Then, at delivery, there will usually be an invoice from the supplier. These can come by mail, with the shipment, or electronically. 

Once invoices arrive, they are processed manually. Often, this process includes verifying the purchase order, the approval, and the quality of goods. Finally, the AP department will issue payment to the supplier.

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P2P automation speeds up the process

Here’s the thing: for most companies the P2P process is lengthy. Without AP automation and procurement software, it can take a long time to get vendors paid. In addition, a paper-heavy process makes it hard to track departmental spend in a timely manner.

On the other hand, automated procurement software helps speed up the process. Most of the comparisons of POs with invoices and other payment steps are streamlined. Not only can some functions happen automatically through AI, but management can see relevant documents at a glance. In other words, procure-to-pay automation makes everyone’s life easier.

Want to learn more? Visit our Purchase Order
guide.