The document outlines the procure to pay (P2P) process, which involves obtaining raw materials, managing supplier transactions and data, and paying suppliers. It describes key activities like purchasing, receiving goods, and invoice processing. The P2P process aims to manage working capital, prevent fraud, maintain supplier information, and ensure on-time payments. Key performance indicators measure factors like order volume, budget compliance, savings, cycle times, and supplier performance and compliance. The process relies on documents such as procurement plans, supplier setup forms, purchase orders, goods receipts, invoices, and payment reports.

1. ACCOUNTS
PAYABLE PROCESS
BDO India
2017

2. OVERVIEW OF AP PROCESS

3. 3
WHAT IS PROCURE TO PAY?
Procure to Pay (P2P) - Definition
Procure to pay (purchase to pay or P2P) is the process of obtaining and managing the raw
materials needed for manufacturing a product or providing a service. It involves the
transactional flow of data that is sent to a supplier as well as the data that surrounds the
fulfillment of the actual order and payment for the product or service.

4. 4
PURCHASE ACTIVITIES IN AN ORGANIZATION
Purchaser
 Identify vendors
 Negotiate commercials
 Build vendor
relationships
 Place orders
Consumer
 Daily
operations/business
continuity
 Quality of the
product/service
 In time delivery
 Price/budget
considerations (value
for money)
Accounts Payable
 Manage working capital
of the business:
 Maintain Vendor
database
 Preventing frauds
 Reconciliation of vendor
accounts
 Manage vendor helpdesk

5. 5
PROCUREMENT
Functions and activities
Purchaser Mapping out material requirements with sources and resources
Vendor
Management
Evaluating and selecting vendors as well as reviewing vendor
performance periodically
Purchase Order
Monitoring inventory and requirements. Contacting vendors and
ordering the goods/ services
Goods Received
Note
Receiving materials and storing them and issuing receiving note
Invoice Processing
& Payables
Receiving invoices and accounting for payables

6. 6
Purchasing Invoicing
Vendor
Performance
IT Supports Vendor Masters
PROCUREMENT
Performance Indicators
 No./ Value of open
orders
 PO Vs Non-PO
Purchase
 Preferred Vs Non
Preferred purchase
 Spend over Budgets
 Savings over 1st
Quotes
 Savings over
previous year
 Cycle time – PR to
PO
 No. of Invoices paid
on time
 % Discount availed
 Debit balances > X
period
 Credit balances > X
period
 Cycle time –
invoice processing
 # of accurate
recording/
payment
 # of duplicate
payments
 # of debit/ credit
notes (& reasons)
 No/ Value of Goods
received not
invoiced
 Key SLAs agreed
with vendors
 Improvement % in X
period over Y
period
 # of vendor
complaints
 System response
 System downtime
 % New vendors
added
 % vendors
deactivated
 # vendors
blacklisted

7. 7
PROCESS DOCUMENTS
Procurement
Planning
 Procurement Plan
 Variance Report
 Procurement Budget
Vendor
Management
 Vendor Setup Form  Vendor Performance
Requisitioning &
Purchasing
 Bids Evaluation Summary
 Purchase Order
 Authority Matrix
 Purchase Requisition
 RFQ
 Vendor Quotes
Receiving &
Warehousing
 Goods Receipt Note
 Quality Control Check
 Bin Cards
 Inventory Ledger
Invoice Processing
& Payables
 Invoice
• Authorized Signatory
 Bids Evaluation Summary
 Purchase Order
 Authority Hierarchy
 Purchase Requisition
 Request for Quote (RFQ)
 Vendor Quotes
 Payments report