Procure-to-Pay: From Requisition to Settlement and Process Integrity
The end-to-end chain
Procure-to-Pay (P2P) is the full cycle: requisition → approval → purchase order → receipt of goods/services → invoice → match → payment → reconciliation. Questions test whether you can locate a breakdown in that chain and identify the control or master-data fix. Understand catalog vs. non-catalog purchasing, punch-out ordering, blanket and contract POs, and the difference between a requisition (internal request) and a purchase order (external commitment).
Master data and process integrity
Vendor and item master data drive matching accuracy. Duplicate vendor records cause duplicate payments; stale pricing causes tolerance exceptions. Know receiving as the control point that confirms quantity and condition, and inspection as the quality gate. In service procurement, service entry sheets or time-and-materials confirmations substitute for goods receipts.
Traps to watch
(1) A PO does not create a liability; receipt or invoice recognition does, depending on policy. (2) Change orders to a PO must flow through approval, or commitments become unapproved spend. (3) Maverick spend (buying outside the process) defeats matching and analytics. (4) GR/IR (goods receipt/invoice receipt) clearing accounts must be monitored - an aged balance signals missing invoices or receipts. (5) Approval limits apply to the committed amount, including tax and freight, not just unit price.
Worked rule of thumb
If GR/IR shows a debit balance for a vendor, goods were received but no invoice booked; a credit balance means an invoice was booked without a receipt. Age these balances monthly and clear them before period close.
Improvement lens
Candidates should recognize cycle-time and touchless-rate metrics, supplier onboarding controls, and the value of e-procurement catalogs in reducing exceptions.