7 min

What Is Procure-To-Pay? A Definitive Guide to P2P in 2022

Procure-to-Pay (P2P) is the dematerialisation of purchasing and accounts payable systems to increase their efficiency. In other words, the Procure to Pay process goes from the acquisition of the necessary raw materials to their payment. A strategic and financial issue in its own right.

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What is the P2P payment process?

The term "Procure-to-Pay" refers to the set of technical and software architectures from product search to payment in a business/supplier relationship. It is also known as Purchase-to-Pay. By definition, the P2P process encompasses the major processes in the purchasing cycle:

  1. Demand: search for products, request for quotation then purchase, negotiation with suppliers;
  2. Procurement: sending the purchase order, receiving the order;
  3. Payment: receipt, reconciliation and processing of the invoice, payment, accounting.

For each of these cycles, Procure-to-Pay solutions will seek to automate as many processes and functions as possible. For example, they will enable companies to use optical character recognition (via OCR) for reading and entering invoices into accounting software.

They include verification and tracing features, such as a reliable audit trail.

Implementing a P2P solution allows companies to gain visibility and transparency on their spending. But that's not all: it's also about freeing up the resources allocated to all those necessary but time-consuming low-value-added tasks. All these processes contribute to putting productivity back at the heart of the company's operations.


In small structures such as VSEs and SMEs, invoices are often managed by the manager himself, in the evening or at weekends. In addition to affecting business productivity, this increases the risk of input and payment errors.

To optimise purchasing processes, the scope for human intervention must be reduced as much as possible. The solution? A digitised and automated workflow. The idea is not to replace humans with machines, but to use the advantages of digital technology in low-value-added processes, such as the processing of supplier invoices and the updating of accounting entries.

By automating accounting processes, the company frees up resources and time for more productive tasks.

Last but not least, consolidating supplier data helps to better manage purchasing cycles has a direct impact on cash flow, supplier relationships and company profits.

Dematerialising paper invoicing is now a priority for administrative and financial departments. This is precisely one of the segments of P2P. In the long term, the aim is to :

  • Reduce processing times;
  • Better manage business expenses;
  • Strengthen checks on manual business processes;
  • Automate as many tasks as possible;
  • Improve the company/supplier relationship;
  • And finally, to save money on processes that are usually long and costly.

Procure-to-pay process overview

From the identification of the requirement to the posting of the corresponding supplier account, Procure-to-Pay consists of 4 main steps, grouped in the 3 cycles mentioned at the beginning of the article: requisitioning, purchasing, receiving and paying for goods and services:

P2P example

1. Requisitioning

The process starts with planning the goods or services required: What? What? When? How much? At what price? These considerations are led by the purchasing departments, which must take into account the company's budget. Once the need has been identified, which will result in the future purchase of goods and/or services, the company must choose a supplier.

If the company already works with a supplier, it can go straight to the purchase requisition form.

2. Quotation

If the need is not yet present in the company, the purchasing department should draw up a list of potential suppliers. Then comes the negotiation phase. To do this, the company first asks each supplier to submit an quotation including :

  • Price,
  • Delivery conditions,
  • Material quality
  • Any other information necessary for decision making

This is also when negotiations with suppliers take place (if at all) to obtain the best purchasing conditions.

3. Purchasing order

Once a supplier has been selected, buyers create a purchase requisition form which includes:

  • Order description;
  • Account number;
  • The required signatures;
  • Delivery instructions;
  • Quotation.

The purchase request form has been completed and sent. The next step is the purchase order. This commercial document should be sent to control the purchase of products and services from external suppliers.

If the supplier validates it, this means that he accepts the company's general terms and conditions of sale. The purchase order serves to materialise the customer's acceptance: the supplier contractually commits to deliver the order, and the customer to collect it.

4. Delivery and reception

The supplier prepares the order and it is then delivered to the customer. Upon receipt, the buyer must draw up a receipt. This document will be used to check that the goods received correspond to the order.

To simplify, purchasing departments will highlight the receipt and purchase orders and compare them. If the match is positive, the order has been delivered.

If the match is confirmed, the order has been delivered. If not, the company should contact its supplier and make a claim. The same applies if goods are damaged or missing. Upon receipt of the goods, some final checks are required:

  • Are the goods usable?
  • The correct quantity has been delivered?
  • All goods meet the specifications requested?
  • Is the price as specified on the order form?

⇒ What changes with P2P: Thanks to a personalised management interface, the company has an account for each supplier, which facilitates exchanges and order management.

5. Payment

Once the goods have been checked, the supplier issues a payment invoice, which is validated by the purchasing department and sent to the company. Contrary to what one might think, payment is a crucial step. The invoice must be sent on time, contain all the compulsory information, and be consistent with the order.

⇒ What changes with P2P: to avoid delays and payment errors, Procure-to-Pay solutions rely on a fully paperless approach to invoicing. From the creation of the invoice to its posting, manual processing must be reduced to a strict minimum. This is the best way to avoid input errors, payment errors, duplicates and supplier reminders.

The collection, processing, dematerialization and payment of invoices are all included in the Libeo features. No more duplicate invoices, no more loose sheets, no more emails waiting to be read. All invoices are centralised thanks to a collection solution and processed in a few clicks.

Increase the efficiency of your purchasing function : request your personalized demo today to discover Libeo and its benefits for your organization!

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What is the difference between accounts payable and procure-to-pay?

Procure-to-pay refers to a specific subdivision of the procurement process in software companies. Procurement-to-pay systems integrate the purchasing department with the accounts payable (AP) department.

Is procure-to-pay part of supply chain?

Procure-to-Pay is a vital part of supply chain management, as it provides the materials and services that manufacturing needs to meet production targets and customer demand.

What is the difference between procure-to-pay and purchase-to-pay?

Procure to pay is the same as purchase to pay. They are simply different names for the same process.

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Libeo is registered by ACPR (Prudential Control and Resolution Authority) under the number 844679068 (approval can be consulted in the Register of Financial Agents – as a payment services agent of the electronic money institution Treezor. Treezor, registered in the Paris Trade and Companies Register under number 807465059, whose registered office is located at 33 avenue de Wagram, 75017 Paris, acting as an electronic money institution within the meaning of Article L.525-1 of the French Monetary and Financial Code and approved by ACPR (Prudential Control and Resolution Authority), is located at 4 Place de Budapest CS 92459 75336 Paris Cedex 09 as an electronic money institution under number 16798, approval which can be consulted on the ACPR website in the Register of Financial Agents (REGAFI):