James Donaldson Feb 21, 2022 9:14:00 AM 5 min read

Procure to pay vs purchase to pay, what’s the difference?

What is the difference between procure to pay & purchase to pay? Absolutely nothing.

Procure to pay & purchase to pay are just different terms used for the same operation. Most known as P2P followed by “Purchase to Pay” in the UK, with procure to pay is being used least.

P2P can be a confusing initialism as it’s also be used to represent Peer to Peer, for P2P lending & P2P computing. If you use or know of other definitions of “P2P”, let us know over at our LinkedIn page!

What is P2P, Purchase to pay or procure to pay?

In simple terms, P2P is a business process that includes purchasing (or procuring!) goods from suppliers to the payment of vendors, commonly with an invoice.

What are the stages of purchase to pay?

You could go into a lot of detail but let's keep this first bit short.

The main aspects of P2P are:

  • Requisition
  • Purchasing
  • Payment

Let’s say your office runs out of pens. The office manager will be in charge of re-ordering & will manage a budget for office supplies. Knowing the business’ preferred suppliers (in a best-case scenario!), the office manager will search for the pens they need on the supplier’s website, they may sort available pens by price, delivery date, or carbon emissions (think pens made from recycled materials, etc.). They will take down the item details – price, SKU, etc. – & create a purchase requisition to send to the procurement team.

Procurement might audit the request, perhaps they know of another supplier that has a sale on at the moment, or company policy means they need to pick the most carbon-friendly options. Either way, procurement will either request amendments or approve the request. At that point, a sale order is sent to the supplier.

The pens are then sent from the supplier to the office. Receiving an invoice alongside the pens, the order is then checked to make sure all pens that were ordered were received. The invoice is then sent off to the accounts payable team where it is matched to the purchase order using the PO number, at that point, it’s an approved purchase, & payment can be organized.

What is S2P?

S2P, or “source to pay”, is the full procurement process from sourcing the goods to the said payment of goods.

What does S2P mean?

The souring part of source to pay includes company demand, sourcing items or services, bidding & the request for information, reviewing said information & decision making, contract signing, etc. etc.…

Once the T’s have been crossed and the I’s have been dotted, the process moves to the procurement side of P2P.

What is P2P Automation?

P2P automation is the automation of pain points within a company's P2P processing, requisition of goods, digital procurement, workflows of documents, matching documents, buying preapproval & approval process, digital invoice capture, payment of goods, error management, analytics, & data collection.

Overall, this is a pretty simplistic round-down of abbreviations on certain terms used in the finance industry. They get way more complicated the more you learn & if you are looking to improve, I would recommend checking out blogs written by our CEO Neil Robertson. Hopefully, this will give you a little understanding for your P2P automation journey.

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James Donaldson

I hate bio's but I was told to write one, I kinda actually enjoy my job, creating content for social media purposes and reviewing analytics to increase efficiency to build social platforms. What would I rather be doing? Inside an art studio creating contemporary art that take minutes to make but go for millions (see banana taped to wall for example).
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