What is p2p (Purchase-to-pay) mean?
Purchase to pay, or p2p, is the entire cycle of purchasing, starting right from the purchase request to finally paying the supplier for the goods. It’s the end-to-end process of making a purchase.
A well-optimized purchase-to-pay process can help businesses become time-efficient, get better value for their monetary investments, and enhance overall business performance.
How does the Purchase-to-pay cycle work?
Here’s the step-by-step procedure of P2P cycle:
- The P2P cycle starts with identifying the needs or requirements and finding a suitable supplier for that
- The purchasing policy looks over the purchase request and acts accordingly.
- The company crafts its order and sends it to the vendor or supplier for submission.
- The vendor completes the order.
- The supplier sends over an invoice.
- Finally, the payment gets delivered to the supplier, and the process ends here.
Purchase-to-pay can benefit businesses in a number of ways:
- The P2P cycle can result in overall cost reduction for the company.
- It can also help in minimizing time investments.
- Increased efficiency and execution
- An optimized purchase-to-pay cycle can help businesses ensure happy and satisfied employees.