Accounts Payable and Procurement are strategically linked to streamline the supply chain and find ways to cut costs without compromising quality every step of the way. The more AP and procurement work together, the better supplier relationships and savings to the company can become in the future.
The relation between P2P and AP
P2P or Procure to pay is an end-to-end process from Purchase Requisition to payment to the vendor.
Account payable is a subset(or a part of) the P2P Process.
AP is an accounting and bookkeeping function whereas Procurement is a purchase function.
The purchase-to-pay process, also known as the P2P process, connects the procurement and entire supply chain processes within a company through the goods receipt process, and finally to the payment issued to the vendor.
Procure to Pay = Procure to invoice + Invoice to Pay
P2P:
Material Requisition -> Requisition Approval -> Request for Quotation -> Vendor Selection -> PO -> goods received -> invoice received -> invoice verification -> invoice approval -> invoice payment
Procure to Invoice:
Material Requisition -> Requisition Approval -> Request for Quotation -> Vendor Selection -> PO -> goods received
Invoice to pay: invoice received -> invoice verification -> invoice approval -> invoice payment
Accounts Payable:
PO -> goods received -> invoice received -> invoice verification -> invoice approval -> invoice payment
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