P2P (Procure-to-Pay)
The end-to-end process from purchase requisition to vendor payment.
Detailed definition
P2P (Procure-to-Pay) is the end-to-end procurement process that begins with a purchase requisition and ends with paying the supplier. Its typical steps are: requisition, approval, creating the purchase order (PO), receiving the goods or services, matching the invoice against the PO and goods receipt (three-way match), and payment. The goal is to keep spending under control, prevent unauthorized purchases and ensure invoices are paid correctly and on time. In the SAP world, P2P is run largely through the MM (Materials Management) module and integrates with FI-AP for accounts payable. Process health is tracked with metrics such as PO cycle time, contract compliance (maverick spend rate) and invoice-match success. A mature P2P process also covers vendor master data, approval hierarchies and digital invoice flows. Together with the sales-side O2C process, P2P completes a company's core value streams, and it typically runs on an ERP.
Related terms
ERP (Enterprise Resource Planning)
Integrated enterprise software that unifies core business processes — finance, procurement, manufacturing, sales and HR — on a single data model.
MRP (Material Requirements Planning)
A planning method that automatically proposes purchase and production orders based on production and stock targets.
O2C (Order-to-Cash)
The end-to-end sales process from customer order capture to cash collection.