Procure To Pay Automation – Benefits And Best Practices

01 - October - 2021

Automatic Payment System - Best Practices and Benefits

Successful companies understand that, in today's global and growing competitive economy, it is important to take a holistic approach to all aspects of the business.

This creates a shift in the way jobs are done, especially in the procurement and finance sectors, where processes are repetitive, tedious, and time-consuming.

The most important thing is to re-evaluate your P2P process remotely from business operations.

1) Effective user experience improves high availability and usability, increasing visibility.

2) Integrated statistics establish linkages between strategic objectives to support continuous improvement.

3) End-to-end performance allows for fully automated processes, reduced operational costs, reduced FTE, etc.


The Process Flow of Procure-to-Pay Automation

The P2P payment process includes requisitioning, buying, receiving, billing, and paying for products and services. As the name suggests, P2P includes all the steps involved in acquiring and paying for goods or services.


1. Identify Needs

First, the company needs to identify its needs and how to meet them. That means deciding who will hire to provide the goods or services needed to meet their needs. For example, the marketing team may decide that they need an email marketing management platform. Alternatively, human resources may need help with hiring and deciding whether to purchase an applicant tracking system.

This step consists of determining the needs of the team and potential suppliers, as well as the cost of the goods or services involved.


2. Create Purchase Requisition

Once the department wants to purchase decides the vendor. Cost, timeline, and scope. The department submits a Request for Purchase (PR) or a Purchase requisition. The PR remains within the buyer's company and does not pass to the seller.

The Automatic Purchase Requisition process can save time tracking down the right managers and waiting for approval. Automation can help demand to be directed to the right source for quick and easy authorization.


3. Generate Purchase Order

Once the Purchase requisition is created and submit and approved, the Purchase order sends to the vendor or supplier. PO is a document that is sent to the supplier for agreement for the scope of the work. Both buyer and seller must agree to this document


4. Receive Purchase Order Approval

Next, the purchase order should be approved by the various participants. The first group that needs to provide a green signal to PO is the buyer’s accounting team. Normally, purchase orders were rejected and they had to go back and forth within the organization until all details were correct. Once the required parties on the buyer's side have signed, the seller receives a purchase order and has to agree to it.

The PO approval process is an important step, particularly if companies have P2P processes, as approval may catch significant errors. However, approval can be a difficult step throughout the P2P process, as the PO must go through several hands and can face many obstacles.

The automation of the purchase process removes many manual processes such as typing and sending purchase orders, as well as the purchase order approval.


5. Invoice Matching

Extract invoices from emails and match them to the appropriate POs, and collect hard copies with them. is one of the most difficult tasks of procurement crews. By setting default processes, invoices can be processed when they are automatically matched.

Invoices that do not comply with the three-way matching approach may create warnings and may be modified by personal involvement. While everything can be processed properly. A three-way matching can help highlight differences in the three key documents in the procurement process, purchase orders, order receipts, and invoices, which help to avoid double payments and preparation for audits.


6. Suppliers and Vendors Performance Management

Performing a vendor management process automatically has many benefits, firstly being able to monitor vendors in one way saves a large amount of retrieval and leaves time for strategic operations.

  • Substituting to an automated resolution, purchasing crews can reverse vendor preferences and easily track their performance in pre-established circumstances.
  • Administrations can identify differences in areas of the problem facing the seller and resolve them quickly
  • Supplier details, transaction history, and past orders can be easily recorded and enabled to make better decisions

7. Account Payables

The procure-to-pay automation’s last step is the payment of invoices to the vendors, this includes a financial team, which evaluates payment strategies such as evaluating discount options, agreeing on payment terms, supplier interactions, etc.

  • The main objective of the procurement and finance team is to increase cash flow and focus on cost savings
  • Automated solutions help to use favorable payment terms. It can benefit both retailers and consumers from over usage and save valuable time


The main feature of P2P (Procure-to-Pay) solutions is that they will enable low-cost, high-volume transactions, and strategic purchasing activities. This will free up time to redesign procurement resources to strategic, value-added services. Hence, it is now necessary to move to the "untouchable" P2P process, and with this intonation, organizations can realize savings and efficiency in real-time.

Companies that did not use the automated digital system are subject to human error that often accompanies personal work, late payment due to arguments, and the complete absence of real-time invoices.

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