Procure to pay

Procure to pay (P2P) is the everyday process of buying something and paying for it. Most organisations follow the same steps, usually inside a computer system so every step leaves a record.

It starts with a purchase requisition: someone inside the company asks for something ("we need 200 boxes of printer paper"). A manager with the right budget approves it. Procurement then turns it into a purchase order (PO), which is sent to the supplier. A PO is a legal offer: it says what's being bought, how many, at what price, delivered where and when. Once the supplier accepts it, it's a contract.

When the goods arrive, the receiving team checks them and records a goods receipt: what actually turned up, and in what condition. For a service there's a similar confirmation that the work was done.

Then the supplier's invoice arrives, and accounts payable does a three-way match: the PO (what we ordered, at what price), the goods receipt (what we got) and the invoice (what they're charging) must agree. If the PO says 200 boxes at $30, the receipt says 200 boxes arrived, and the invoice says 200 at $30, it's paid on its due date. If the invoice says 220 boxes, or $32 a box, it's held until someone sorts it out.

The three-way match is one of the main defences against paying twice, paying for goods that never came, or paying a made-up invoice. Buying outside the process ("maverick spend") skips those checks and usually costs more, which is why procurement teams try to make the right way the easy way.