Procure-to-Pay: Here’s What You Need To Know 

The words “procure-to-pay” probably conjure up thoughts in your mind of complex financial transactions and processes.  In a sense, you’d be right. But more on that in a second…the actual accounts payable concept is actually fairly simple.  

In the most straightforward terms, the procure-to-pay cycle is nothing more than the process by which companies inquire about, purchase, receive and pay for the raw goods and services that constitute their larger product.  Simple enough, right? In theory and on paper, sure.  

In realty, the procure-to-pay process is often a morass of tangled information and obligations that can weigh companies down and be a drag on resources if not managed effectively.  By the time the purchase-to-pay cycle reaches its final steps in accounts payable, things can get incredibly tedious.  

Let’s take a look at the different steps in the procure-to-pay cycle, and break down what they entail.  

Procure-To-Pay 101

In a nutshell, you can expect your procure-to-pay cycle to look something like this: 


  • Supply Management– This refers to all of your practices and habits around keeping in contact with your suppliers, and managing your relationships with them as a customer.  Supply management is vital for keeping your supply chain running smoothly and ensuring that your day-to-day operations run smoothly. Nothing can shut down a company’s ability to operate more quickly than a supply issue.
  • Vendor Selection– Vendor selection refers to all the comparative research that goes into successfully choosing the right vendors to work with.  The best vendors will be long-term partners, so this is a very important component of the purchase-to-pay cycle. Manual vendor selection often takes very large amounts of company time and resources to perform successfully.    
  • Requisition-Requisition refers to the process to getting internal approval from department heads or company leaders to order the necessary raw goods or services.  In many companies, this is one of the most convoluted steps in the manual P2P cycle, with signatures getting lost, department heads not being available when needed, and many other manual issues.     
  • Purchase Order-A purchase order is then created by the procurement team.  This is a formal document that spells out the specifics of your order so your vendor can fill it properly and accurately.   
  • Receiving-The receiving phase of the purchase-to-pay cycle refers to the process of physically receiving the raw goods or services that have been ordered.  
  • Invoice Reconciliation-Invoice reconciliation is the act of comparing the invoice to the purchase order to ensure that everything matches up and your vendor has charged you appropriately.  (This is often one of the most tedious aspects of the invoicing process, and one of the major reasons to automate your procure-to-pay process with a pay solution.)  
  • Accounts Payable-This is the last step in the cycle, and refers to handling the purchase order for payment, making sure the payment gets sent out on time, and logging the payment into your accounting system.  (The accounts payable step is also another excellent reason to automate your procurement cycle.)


A Few Procurement Predicaments (And How To Solve Them)

If you’re lacking a formalized procurement department with a clear enterprise resource plan (ERP), you’re hardly alone.  

A recent PayStream Advisors report indicated that only 44% of companies had a dedicated procurement department with standardized organizational processes.  Even for this well-organized minority, however, a plethora of procurement issues and complications still remain. And remember, every step in the P2P cycle that a company leaves up to manual processes represents an opportunity for human error to slip in.  And it only takes a single mistake in a single step of the process for very large problems to start brewing.     

However, whether or not you’re currently benefiting from a streamlined procurement process, you can benefit massively from an e-procurement software system that leverages artificial intelligence and real-time analytics.  We’re living in an unbelievable age in which business leaders have access to technology that would’ve seemed absolutely unbelievable even 50 years ago. Don’t you think it might at least be worth taking a look at?      

Here are some of the most common and tedious problems that you can easily automate with financial software.


  • Lack of Centralized Contract Management-Our e-procurement solution features an effective and easy-to-use contract management interface that allows you to track all of your contracts in one convenient digital location.  Because nothing’s less professional than a lost contract. And if large purchases are being made, then tracking each party’s obligations becomes even more important.
  • Poor Spend Visibility-Procurement software prioritizes easily trackable spend visibility.  You need to know your weekly and monthly costs down to the dime in order to optimize your business processes.  Aside from knowing your costs down to the cent, you’ll also be able to analyze spend areas and plan your resource expenditures more effectively.  
  • Disorganized Order Management-If you’re currently lacking a centralized method of order management, you’re putting yourself at heightened risk of duplicate payments, late fees, and longer-than-necessary cycle times.  All of this slows down your business and places massive drag on your bottom line over a long enough timespan.  


E-Procurement Software For The Modern Company 

Automation software can help you automate and streamline the most tedious aspects of the procurement cycle.  Of course, you’re free to rely on your own resources and skills in creating a viable procurement cycle.  

But why not make your life simpler, and give yourself the gift of more time and resources to pursue your company’s broader success?  We’ve created a fully-functional, multi-tiered e-procurement software that’s equipped to face and overcome even the toughest procurement challenges.  

E-procurement software is being adopted by more and more forward-thinking businesses every year.  But it’s vital that you keep a few best practices in mind when considering automating your procurement process.  Let’s examine what they are.  


  • Customize your solution to your needs.  It’s key to bear in mind that software solutions aren’t one-size-fits-all (especially in complicated fields like AP).  If you’re just launching your business or are involved in some sort of upstart venture, you should scale your payment solution accordingly.  That’s why Tipalti’s e-procurement SaaS allows you to adjust your functionality to accurately suit your actual needs and present situation. Being successful in business often means being a realist: we help you do exactly that.  
  • Always run the numbers.  When considering adopting an e-procurement solution for your business, always run the numbers.  This means budgeting for the various time and financial demands that accompany the setup process of any new business tool.  When adding an e-procurement solution to your daily operations, you’ll need to budget for factors like implementation and integration, compare costs between competing systems, and also compare costs between your current status-quo and the software you’re considering onboarding.  
  • Make your incentives compelling.  What do we mean by this tip, precisely?  In a nutshell, it means that you need to believe deeply and genuinely in the incentives that are guiding your company’s actions.  So what are some of the deeper incentives you might have for adopting an e-procurement solution? Sure, the savings and increased convenience and efficiency are wonderful.  But think beyond that. Once your company is leaner and more agile, you’ll be able to develop better products more quickly, help more people overall, and become a better version of your current business.  When transitioning to an automated system, it’s important to remember the larger incentives that motivated you to make the change in the first place.  

Making The Leap

We understand that there are a variety of potential reasons that business leaders might be hesitant to implement an e-procurement solution.  You might be unsure of the long-term ROI involved. Or you might be adhering to the model of “Don’t fix what isn’t broken.” There might not seem to be anything obviously or terribly wrong with your P2P status quo.  You might be doing just fine, and hitting your goals every quarter. So why worry?

But if you knew you had a simple and seamless solution at your disposal that would optimize your business–to take something good and make it better–wouldn’t you be foolish not to take advantage of it?  

Automation through an e-procurement solution offers a path toward a streamlined, leaner and more profitable company.  

Why Should You Implement E-Procurement?  

Here are a few of the major reasons that have caused many business leaders, CFOs and company presidents to adopt a e-procurement solution for their companies.  


  • Improved Accountability– E-procurement promotes accountability among all employees and departments.  Record-keeping is made seamless, all records are centrally accessible, and spend analysis becomes easier than ever before.  
  • Automated purchasing controls-Stop wasting time on complicated approval hierarchies, physical signature trails and all the other pitfalls of manual P2P processes.  E-procurement software allows you to put purchasing controls in place with automated approvals when you need them. You’ll even be able to create approval thresholds for specific dollar amounts, giving you centralized control over your company’s spending practices. 
  • Seamless tax assistance-E-procurement software allows you to make sure all your bases are covered when tax season rolls around.  You’ll have access to automated purchase reporting, electronic audit trails and many other incredibly useful features.  


An e-procurement solution helps make sure that your procurement department runs smoothly, effectively, and in a way that cuts department costs and contributes to the profitability of your wider company.  

Odds are high that your purchasing director is currently struggling with a plethora of challenges to overcome.  Whether it’s cutting costs, improving your P2P effectiveness, ensuring everything’s aboveboard come tax season or any of the other countless tasks involved in P2P, an e-procurement solution can help you improve your purchasing department drastically.  Other key benefits that businesses report from using e-procurement solutions have been increased spend visibility, and heightened security and control.