Purchase-to-Pay process – P2P

What is purchase-to-pay?

Purchase-to-pay (P2P), also known as procure-to-pay, is an internal business process encompassing all activities from procurement to invoice payment. This process covers the entire procurement cycle, from purchasing goods and services to making payments and tracking orders. P2P is not a single procedure but a collection of various individual processes occurring across different company departments. These steps are integrated and streamlined using purchase-to-pay software, creating a fully connected procurement workflow. The goal of a digital P2P process is to manage procurement and payment tasks efficiently, facilitating smooth data exchange between departments. Additionally, it aims to reduce costs and minimize errors associated with manual processing.

Definition and process steps

The purchase-to-pay (P2P) process involves several steps, starting from ordering goods or services to paying invoices. It can be divided into two main areas: procurement (purchase) and payment (pay). Here’s an overview of how it works:

Procurement-Related Process (Purchase) 

1. Identification of requirements: The need for goods or services within the company is identified, arising from consumption, production requirements, or other business needs.
2. Requirement request: Once identified, the department manager or an employee submits a request detailing the needed quantity, specifications, and any delivery deadlines. 
3. Approval: The request goes through an approval process where it is reviewed and either approved or rejected to ensure alignment with company policies and budget.
4. Order: The approved request leads to placing an order with the selected supplier.
5. Order confirmation: The supplier sends back an order confirmation, detailing terms, prices, and delivery times, thus accepting the order.
6. Delivery: The goods are delivered or services rendered, involving the transportation of products to the company's location.
7. Incoming goods inspection: Upon delivery, the company inspects the goods to ensure they meet the order specifications, including quality, quantity, and adherence to specified standards.

State-of-the-art standard P2P solutions

Digitized procurement process with full transparency

In the future, your P2P process can be automatically initiated upon receipt of a procurement request. The requester can submit the procurement request through an up-to-date web interface, which then forwards it for review and approval. From there, the procurement request can be directly sent to purchasing via the ERP system to place an order. With the digital edoc solution, you gain complete transparency over the entire procurement process, allowing you to track the status of each request at any time. Each request, along with its associated workflow log, can be easily linked to the ERP order, the delivery note, and subsequent incoming invoices, which are automatically processed using the edoc invoice system.

Find out more about the procurement process

Fully automated order confirmation from any source

Our flexible input solutions help you to record all incoming order confirmations regardless of form and format and to transfer them to the next automated process. Your data and the digital document will be made available for viewing. This saves the user a huge amount of manual typing and, at the same time, greatly reduces the number of errors. This results in satisfied users who can concentrate on their core tasks and significantly improved process performance!

Find out more about order confirmation

Vastly accelerated incoming invoice processing

Based on your ERP or financial accounting system, edoc offers ready-made software solutions that take over all the main tasks of the invoicing workflow. Entire work steps that are currently manual and prone to errors can be automated, thereby simplifying and accelerating the entire process. All incoming invoices, whether they arrive by post, e-mail, in ZUGFeRD format, as an XRechnung or via an invoice portal, are automatically and reliably recognized by high-performance document readers (OCR) and transferred to a digital process for further processing. This allows your accounting department to focus fully on the technical validation of the recognized data before forwarding the e-invoice to the verification and approval workflow. Sophisticated user interfaces ensure ease of use and deliver the right information to the right place at the right time. This saves time, creates transparency and speeds up your business-critical processes many times over!

Find out more about incoming invoice processing

Make your purchase-to-pay strategy a digital success

Would you like to digitize your analogue processes or have you already digitized individual processes and are now planning to combine the individual processes into a fully integrated purchase-to-pay process? As a first step, you should analyse your existing P2P processes to determine which departments and employees are involved and which problems regularly occur. Conduct a thorough review of both your existing procurement process and your accounting processes and identify inefficient processes. In which areas is the workload particularly heavy and the workload the highest? Also analyze the communication between your company and your suppliers - from the order to the order confirmation as well as the internal inspection and approval processes.  

A thorough analysis forms the foundation for successfully digitizing your purchase-to-pay operations. Next, select a software solution that aligns with your company's needs and objectives. Consider factors like automation capabilities, user-friendliness, integration potential with existing systems, and adherence to industry standards. Implementing digital solutions can boost efficiency, cut costs, enhance process transparency, and bolster your company's competitive edge.

Contact us