Procure-to-pay is a term used in the software industry to designate a specific subdivision of the procurement

Procurement

Procurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location...

 process.

Definition

The procure-to-pay systems enable the integration of purchasing department with account payables department. Some of the largest players of the software industry such as Oracle, SAP, ARIBA or B-PACK agree on a common definition of procure-to-pay, linking the procurement process and financial department. These steps are included in this definition:

• Supply management
• Cart or requisition
• Purchase order
• Receiving
• Invoice reconciliation
• Accounts payable

Unlike purchase-to-pay

Purchase-to-pay

Purchase-to-pay, often abbreviated to P2P and also called req to check, refers to the business processes that cover activities of requesting , purchasing, receiving, paying for and accounting for goods and services.-Automation:...

 systems, procure-to-pay systems do not include the function of sourcing

Sourcing

In business, the term word sourcing refers to a number of procurement practices, aimed at finding, evaluating and engaging suppliers of goods and services:*Global sourcing, a procurement strategy aimed at exploiting global efficiencies in production...

. Also, notions of production planning and forecasting

Forecasting

Forecasting is the process of making statements about events whose actual outcomes have not yet been observed. A commonplace example might be estimation for some variable of interest at some specified future date. Prediction is a similar, but more general term...

 will be excluded from this definition since it relates to the supply chain management

Supply chain management

Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...

.

Benefits

Procure-to-pay systems are designed to provide organizations with control and visibility over the entire life-cycle of a transaction – from the way an item is ordered to the way that the final invoice is processed – providing full insight into cash-flow and financial commitments. Most of the companies using these systems look for a centralization

Centralization

Centralisation, or centralization , is the process by which the activities of an organisation, particularly those regarding planning and decision-making, become concentrated within a particular location and/or group....

 of their procurement department, or to set up a shared services

Shared services

Shared services refers to the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an...

 organization for the same purpose.

According to Aberdeen, despite the availability of technology that can drastically reduce the mountains of paperwork and inefficiencies plaguing accounts payable, few companies have addressed AP transformation like other processes essential to the business.

Risks

As with any system that touches a significant number of users, implementing a procure-to-pay system requires significant knowledge of the as-is business processes as well as the to-be. Change management is a key component in implementing a procure-to-pay solution.

See also

• Supply chain
  Supply chain
  A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
  
   and supply chain management
  Supply chain management
  Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...
  
  
• E-procurement
  E-procurement
  E-procurement is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other informations and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning.E-procurement...
  
  
• Purchase-to-pay
  Purchase-to-pay
  Purchase-to-pay, often abbreviated to P2P and also called req to check, refers to the business processes that cover activities of requesting , purchasing, receiving, paying for and accounting for goods and services.-Automation:...
  
  
• Spend management
  Spend management
  Spend management is the way in which companies control and optimize the money they spend. It involves cutting operating and other costs associated with doing business...
  
  
• Contract management
  Contract management
  Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and...
  
  
• Purchasing
  Purchasing
  Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise. Though there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations...
  
  
• Procurement outsourcing
  Procurement outsourcing
  Procurement outsourcing is the transfer of specified key procurement activities relating to sourcing and supplier management to a third party — perhaps to reduce overall costs or maybe to tighten the company's focus on its core competencies...
  
  
• Shared services
  Shared services
  Shared services refers to the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an...