2. 2
PROCURE TO PAY CYCLE
Request for procure
Vendor selection
Raising order
Receiving of Goods
Receiving of invoice
Payment
3. 3
RECEIVING OF INVOICE
In order to obtain the payment a vendor must send an invoice for the purchases supplied
The invoice is a request for payment and is normally sent to a company’s finance
department
A vendor invoice should contain the following details:
• Company name, address and registration number
• Unit price, quantity of the purchase supplied
• Payment terms and purchase order number
• Gross amount, net amount
• Taxes (if any)
4. 4
INVOICE PROCESSING
Finance department review the vendor’s invoice to ensure it is fit for purpose
The invoice is registered to AP ledger to register the financial liability
Once approved, the invoice can than be paid on its due date according to the payment
terms
5. 5
INVOICE PROCESSING AND PAYMENT
Process Flow Map
Goods Receipt Note
Procurement
Officer
Vendors Stores
InvoicePurchase
Order
Accounts Payable Officer
Accounts
Payable
Manager
7. 7
INVOICE APPROVAL
All invoices must be approved in order to enable payment
An invoice needs to go through the process of two way or three way match
before vendor can be paid for it
8. 8
TWO WAY MATCH
In two way match the invoice value is matched with the purchase order value
If all the items match, the invoice is approved for payment
9. 9
THREE WAY MATCHING
In three way match the vendor invoice will be matched with the purchase order
and actual delivery of purchases (GRN)
If all the above items match, the invoice is recorded
GOODS RECEIVED NOTE
10. 10
TAX ACCOUNTING
While recording invoice in the system, tax amount should be recorded correctly. This enable
entity to:
Accurate and timely filing of VAT, sales tax returns etc.
Recording of accurate input VAT which needs to be claimed later
Apply correct rates while selling the products to their customers
