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Procure-to-Pay (P2P) or Purchase-to-Pay

Procure-to-pay (P2P), also known as purchase-to-pay, is the second half of the source-to-pay (S2P) cycle that deals with the operational aspects of acquiring and paying for goods and services. 

The P2P process includes the following activities:

  • Requisition
  • Approval
  • Ordering
  • Receiving
  • Processing payments and invoices

Related terms

Current Accounts Payable
Current accounts payable (CAP) is a metric that works alongside current accounts receivable by providing information on your company’s debts. Accounts payable are current liabilities – your business will eventually need to pay its debts, which will result in cash outflow.
Current Ratio
Current ratio is a metric that makes it easier for businesses to understand their ability to deal with short-term liabilities.
Days Payable Outstanding (DPO)
Days Payable Outstanding (DPO) is a financial metric that measures the average number of days a company takes to settle its bills with suppliers or creditors for purchases made on credit. In simpler terms, it tells you how long, on average, a company takes to pay off its outstanding accounts payable (AP).
E-invoice
An e-invoice is created, sent, received, and processed electronically, often through standardized formats like XML or EDI (Electronic Data Interchange).
Forecast Variance
Forecast variance is the difference between a predicted result and the actual outcome over a given period for a variety of business activities.
Free Cash Flow
Free cash flow (FCF) describes the cash left over after your company pays its operating expenses and handles maintenance costs for capital assets.