What is Purchase to Pay? Complete Guide to the P2P Process
Purchase to Pay — or P2P — is the umbrella term for the entire journey from a need arising to the supplier being paid. It's one of the most fundamental concepts in modern procurement, and simultaneously one of the most misunderstood. Many think P2P is just invoice handling; others equate it with ordering. The truth is that P2P is the full chain — and how you organise it determines whether procurement is a strategic value creator or an administrative cost.
In this article we explain what P2P is, which steps are involved, why modern organisations automate the process, and what to look for when choosing a P2P system.
Key takeaways
- • P2P is the entire process: need → order → approval → goods receipt → invoice → matching → payment
- • Manual P2P typically costs €50–150 per order in administrative time
- • Automated P2P cuts this by 60–80% and gives real-time spend visibility
- • Modern P2P systems like Vieri link ordering, approval and invoice matching seamlessly
What does Purchase to Pay actually mean?
Purchase to Pay — also known as «Procure to Pay» — is the end-to-end process that starts when an employee identifies a need and ends when the supplier has received payment. The abbreviation P2P is used interchangeably.
P2P differs from «Source to Contract» (S2C), which is about finding suppliers and negotiating agreements. Where S2C is strategic, P2P is operational. Together they form the full «Source to Pay» view (S2P).
💡 Simple definition
Purchase to Pay = everything that happens from an employee saying «we need this» to the supplier receiving payment.
The 7 steps of a typical P2P process
1. Need identification
The process starts when someone — a field worker, a department head, a procurement coordinator — discovers the organisation needs something. Safety helmets, office chairs, consulting services, software licences.
2. Order creation
The need is formalised as an order. In modern systems this happens through a catalogue of negotiated contract suppliers. In less mature organisations it happens via email, phone or «just order it directly».
3. Approval
Based on amount and category, the order is routed to the correct approver. A small order might be approved by the immediate manager; a larger one goes to CFO or leadership. This phase is where most organisations lose time — either because approvals take days, or because no one has clarity on who approves what.
4. Order to supplier
After approval the order is sent to the supplier. In old systems this is a PDF attached to email. In modern systems it goes electronically via PEPPOL, and the supplier gets a notification directly in their own system.
5. Goods receipt
When goods arrive or the service is delivered, this must be recorded. Without goods receipt you can't verify that what you got matches what you ordered — and you can't automatically match the invoice to the order.
6. Invoice receipt and matching
The supplier sends an invoice. In a manual process, someone must check it against the order and goods receipt, verify price and quantity, and code it to the right cost centre. In automated systems this is done with 3-way matching — order, goods receipt and invoice are compared automatically.
7. Approval and payment
Invoices that match perfectly are approved automatically and sent for payment. Invoices with discrepancies are routed for manual review. Payment happens via bank or EHF, and the transaction is booked in accounting.
What does manual P2P cost?
Ardent Partners, in AP Metrics that Matter 2025, put the average cost of processing a single invoice at USD 9.40, against USD 2.78 for best-in-class — under a third. Processing time is 9.2 days against 3.1. For an organisation handling 10 000 invoices a year, the gap between average and best-in-class is roughly USD 66 000 on its own, before touching the cost of the goods.
Costs typically break down like this:
- Order creation (30 min): Find supplier, check prices, create order — €20–40
- Approval (15 min): Find right approver, follow up, chase — €10–20
- Invoice handling (15 min): Receive, check, code, approve — €10–20
- Exception handling (variable): Discrepancies between order, goods receipt and invoice take 2–4 hours per case
Adding the cost of maverick buying (2–5% of procurement budget), you quickly understand why modern organisations automate P2P.
Automated P2P: What changes
A modern P2P system like Vieri automates the entire chain. Instead of emails and Excel sheets, you get:
| Step | Manual process | Automated P2P |
|---|---|---|
| Ordering | Email, phone, random supplier | Catalogue with contract prices |
| Approval | Manual routing, days in queue | Automatic routing, mobile approval |
| Supplier order | PDF via email | PEPPOL/EHF, directly into supplier ERP |
| Invoice matching | Manual check against order | Automatic 3-way matching |
| Coding | Manual per invoice | Automatic from order |
💡 Did you know?
Vieri customers typically report 60–80% reduction in administrative time per order after moving to automated P2P. Skanska saves over 5 000 hours annually on invoice handling alone.
What to look for in a P2P system
Not every system that calls itself «P2P» covers the full chain. The checklist below is a good start:
- Catalogue-based ordering: Employees should buy from negotiated agreements, not from memory
- Flexible approval flow: Different rules based on amount, category and department
- PEPPOL support: Electronic orders and invoices via access point
- 3-way matching: Automatic comparison of order, goods receipt and invoice
- ERP integration: SAP, Visma, Xledger, Unit4 — look at prebuilt integrations
- Mobile-friendly: Approvals on the go
- Spend analysis: Real-time visibility of spend by category and supplier
- Open API: Don't lock yourself to one vendor
P2P isn't just an IT project
Successful P2P implementation is as much about process and people as technology. Common mistakes:
- No ownership: Without a clear P2P owner, the project falls between procurement, finance and IT
- Missing supplier onboarding: The system only works if suppliers are on board — see our supplier portal guide
- Too strict rules from day one: Start pragmatically, tighten later
- Ignoring change management: Employees who don't see the value will find workarounds
Get started with modern P2P
Purchase to Pay is no longer a luxury for enterprise. With modern cloud solutions like Vieri, mid-sized organisations can get full P2P functionality in 4–8 weeks, without major IT projects.
Vieri covers the entire P2P chain: Vieri Ordering for employees, Vieri Supplier Portal for suppliers, Vieri Connect as PEPPOL access point, and integrations to all major ERP systems.
See how P2P can work in your organisation
Book a 30-minute demo and see the full Vieri P2P flow in action — from first order to automatic invoice matching.
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