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What is the Purchase-to-Pay Process?

The Purchase-to-Pay process is also known as P2P, procure-to-pay, or req-to-check. It refers to business processes that cover requisitioning, purchasing, confirming, receiving, paying for, and accounting for goods and services. The transactional volume is often high, and each step within the processes is a potential source of errors. This makes P2P a good target for process mining, which brings visibility to the entire end-to-end P2P process and identifies root causes for problems.

An example of a Purchase-to-Pay process includes process steps such as purchase order item created, vendor invoice creation, goods receipt, invoice receipt, and accounting doc cleared. Here's what a typical Purchase-to-Pay process looks like when it is visualized in a process flow chart:

 

p2p1

 

Purchase-to-Pay & Process Mining

Would you like to have better procurement, lower buying prices, and higher internal efficiency? Process mining can help you improve your P2P process performance and achieve the following business benefits.

 

Better Procurement

  • Shorter P2P lead times
  • Improved first time right rate

Lower Buying Prices

  • Better discount due to shorter payment periods.
  • Less maverick buying, improved use of frame agreements.

Higher Internal Efficiency

  • Fewer POs without purchase requisitions.
  • Fewer post-PO changes.
  • Shorter lead times from invoice received to invoice posted.
  • Increased automatic processing of purchases.
  • More on-time deliveries.
  • Better managed vendor base.

 

In addition to business benefits, you can also gain a fact-based understanding of your P2P process. Let's hear from one of our customers, Fauzia Khan, Business Process Manager, Nokia:

"Process mining helps you to understand, for example, in Procure-to-Pay:

  • How does your ordering, procurement process look like?
  • How do you raise a purchase order?
  • How many approvals does the purchase take?
  • What kind of teams are involved in the process?
  • How often do you have rework in the process? "

 

Through process mining, not only can you visualize the end-to-end Purchase-to-Pay process in process flow charts, but you can also effectively find the business segments with the biggest improvement potential. You'll be able to tell which dimensions, such as vendor, purchasing organization, currency, or PO type, affect the P2P process the most, whether for good or bad.

 

Purchase-to-Pay Application by QPR ProcessAnalyzer

In this application mindset, we have created an all-in-one solution that fits all Purchase-to-Pay analysis needs and the best part is: you don't have to be a data scientist. The application contains the advanced general features of QPR ProcessAnalyzer, but also comes preloaded with customized, process domain -specific, analysis dashboards for analyzing specific phenomena in the purchase-to-pay sphere.

With QPR ProcessAnalyzer, you are instantly able to get the insight of your as-is process with a robust suite of analysis tools. Lead times, flows, event amounts and other key insights can be instantly gathered from the process mining data loaded into QPR ProcessAnalyzer using the graphical analysis tools offered. These findings can be furthered with our ChartView -feature. This allows for using the process data to calculate and create chart presentations according to the customizable settings offered in the analysis tool. Compare case attributes, divide them by time, add event attributes to the presentation. All of this can be achieved with ChartView.

p2p2

p2p3

If you'd like to know why your incoming invoices are not always connected to purchase orders, why your organization's three-way matching doesn't work the way it should, or what exactly leads to slow processing of invoices that excludes you from getting significant cash discounts, download the brochure below to get started with putting your processes in order.

 

Download QPR P2P Brochure

Get started with QPR ProcessAnalyzer

 

 

Customer Stories

Customers - Nokia - LogoRead success story

“The Visualization of the Processes is a great tool for communicating the needed changes for the process stakeholders. Showing the actual happenings clarifies the needs for process improvements and makes the points of improvement clear. QPR ProcessAnalyzer is truly a gamechanger for process improvement.” 

- Fauzia Khan, Business Process Manager, Nokia

 

Customers - Terumo - Logo
Read success story

"We have now a lot of KPIs in reports, and they are not reflecting the situation that are difficult to change, because there are a lot of things behind it to calculate it, but then you get a report and it's not so easy to understand it anymore. QPR is, for us, an easy tool to verify, is our business working this way? Is it value added to change the process?"

- Daisy Rolly, Business Analyst Supply Chain, Terumo Europe

 

"The good thing is that, in 3 months you build something that's a complete x-ray of the processes, so you have no more debate on whether the KPIs are defined properly, or what definitions to use, you can look at the processes, the actual processes, you can look at the lead times, and you can bring those facts on the table without debates, it's coming right out of your system and having that is a big power in making decisions with those fact-based data."

- Siem Jaspers, Business Analyst Supply Chain, Terumo Europe