Purchase-to-pay process

To begin with, the terms purchase-to-pay and procure-to-pay are often used synonymously. Purchase-to-pay refers to the process of acquiring goods in companies, in other words the procurement process. In short, it deals with the purchase of goods and services up to their final payment. That is the rough framework in which the procure-to-pay process moves. It is desirable to model these processes digitally.

 

Subprocesses of purchase-to-pay

 

A closer look shows that the procurement process consists of potential individual process steps. In principle, the entire process of purchase-to-pay can first be divided into two process aspects – the aspect of needs-related processes and that of payment-related processes:

 

Purchase-to-pay – the needs-related processes

Everything starts with the requirement notification. Either manually – someone needs something and initiates the requirement notification – or the whole process starts automatically. In overview, the needs-related part of the purchase-to-pay process consists of:

  • the requirement notification
  • its verification and approval
  • the order
  • the order confirmation
  • and the goods receipt

 

The payment-related processes in procure-to-pay

An incoming invoice is present no later than with the goods receipt. From there, the payment and posting part of the purchase-to-pay begins. That consists of:

  • invoice receipt
  • invoice processing
  • matching with the order
  • invoice release
  • approval

It is obvious that a digital purchase-to-pay process in companies provides a tremendous boost to transparency. Similarly, purchase-to-pay also accelerates the process cycle times immensely – a well-functioning Purchase-to-Pay system assumed.

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