Procure to Pay: What it is and How it Works (Complete Guide for UK Businesses)

The procure to pay process (P2P) connects the business need, purchase approval, supplier selection, purchase order, receipt, invoice matching and payment in one harmonised and controlled workflow. This gives procurement, operations and finance a shared record of what was requested, approved, received and paid.

This guide explains what the procure-to-pay process means, how each stage works, which controls matter most, how to improve the process and how UK businesses can manage international supplier payments alongside it.

We've also explained how Wise Business can support the payment stage for eligible businesses once an invoice has been approved.

Discover Wise Business 🔎

---

Note: Wise Business offers a free Essential plan for basic spending and transferring. If you need to receive money, set up direct debits, or generate invoices, you'll pay a one-time £50 setup fee to unlock the Advanced features.

---

Procure-to-pay process at a glance

What does procure-to-pay mean?

Procure-to-pay, often shortened to P2P, is the end-to-end process a business uses to buy goods or services and pay the supplier. It connects procurement, budget holders, receiving teams, accounts payable and payment operations.

According to CIPS's procure-to-pay process guide:¹

• P2P integrates purchasing and accounts systems to increase efficiency and give greater visibility to procurement and supply activity.¹
• The process covers a series of stages for managing goods and services from external suppliers, including identifying needs, creating and approving requisitions, creating and approving purchase orders, receiving goods or services, processing invoices and paying vendors.¹

According to GOV.UK's procure-to-pay guidance:²

• P2P represents business functions covering requisition, purchase order, receipt of goods or services, purchase invoice, supplier payment and recording transactions in the financial accounts.²
• Transactions should complete the full P2P cycle from the source document to the general ledger, with manual overrides subject to tolerance limits and approval controls where automation determines values.²

The term is sometimes written as purchase-to-pay. Some organisations use procure-to-pay for a wider process that includes sourcing and supplier selection, while purchase-to-pay refers more narrowly to the transaction. Check how your organisation defines the boundary, but make sure the process map covers every hand-off from request to payment.

Step-by-step procure-to-pay process

1. Identify the business need

An employee or team defines what it needs, why it is needed, when it is needed and the expected cost. The request might relate to stock, software, professional services, equipment, facilities or an ongoing supplier arrangement.

Before raising a new request, check whether an existing contract, catalogue, framework or preferred supplier already covers the requirement. This can prevent duplicate buying and help the business use negotiated terms.

A useful request should include:

• A description or specification of the goods or services
• The business purpose and required delivery or service date
• The expected amount and currency
• The relevant department, cost centre or project
• Any statement of work, quote, contract or supporting document
• The preferred supplier, if there is one

Good information at this stage makes later approval, ordering, receipt and invoice matching easier.

2. Raise a purchase requisition

A purchase requisition is an internal request for permission to buy. It isn't yet an instruction to the supplier and shouldn't be treated as a purchase order.

The requisition normally records the requester, business purpose, category, quantity, estimated value, budget, delivery date and supporting documents. A catalogue or approved buying list can reduce free-text errors and make routine requests quicker.

The requisition should create a reference that follows the request through approval, purchase-order creation, receiving and accounts payable. A shared reference is particularly useful when procurement, finance and operational teams use different systems.

3. Check the supplier and sourcing route

Procurement or the relevant budget owner checks whether an approved supplier is available and whether the proposed purchase follows the correct sourcing route. Depending on the value and category, the business may need quotes, a tender, a contract review or additional due diligence.

Supplier onboarding should capture the information needed to buy and pay safely, such as:

• Legal name and trading name
• Registered or trading address
• Tax and VAT information where relevant
• Contacts and contract owner
• Goods or services supplied
• Agreed prices, currency and payment terms
• Bank details and the approved route for changing them
• Delivery, service-level and insurance information where relevant

For a new supplier or a changed bank account, verify the information independently through a trusted contact route. Do not rely only on the email or invoice that requested the change.

4. Approve the requisition

The requisition follows the organisation's approval matrix. The route may depend on the amount, category, department, budget, risk or legal entity involved.

An approval should answer a defined question, such as whether:

• The purchase is necessary
• The budget is available
• The sourcing route is appropriate
• The supplier is approved
• The price and terms are acceptable
• Any legal, information-security, data-protection or operational review is complete

Separate the requester, approver, supplier-data administrator and payment authoriser where the size and risk of the business make that practical. Keep evidence of the approval before the order is sent.

5. Create and approve the purchase order

Once the requisition has been approved, the business creates a purchase order, or PO. The PO should contain the supplier, PO number, goods or services, quantities, prices, delivery details, payment terms, tax treatment and the entity responsible for payment.

According to GOV.UK's procure-to-pay guidance:²

• POs should be placed only for approved requisitions.
• POs should be accurately recorded and created before receipt of supplies and invoice processing, unless the business has a documented exception route.²
• Changes made after receipt or invoice arrival should be blocked or tracked.²

Send the approved PO to the supplier before work starts or goods are dispatched where possible. Tell the supplier which PO number to include on its invoice. A PO is evidence of the authorised order and agreed terms; it isn't proof that the goods or services were received.

6. Receive the goods or services

The receiving team records what arrived, when it arrived and whether it met the order. For physical goods, this may be a goods-received note. For services, it may be a milestone approval, timesheet, acceptance note or project-owner confirmation.

Record partial deliveries, substitutions, shortages, damaged goods and disputed work against the PO. If receipt information is delayed until an invoice arrives, accounts payable may not be able to tell whether the invoice is ready to pay.

According to GOV.UK's procure-to-pay guidance:²

• Supplies should be received and accepted only where there is a valid PO, unless an approved exception applies.
• Receipt records should be accurate, and changes made after invoice processing should be blocked or tracked.²

For services, agree in advance what counts as completion and who can confirm it. This avoids paying a recurring invoice when the contracted service has not been delivered or a milestone remains disputed.

7. Capture and match the supplier invoice

Accounts payable captures the invoice and checks it against the purchase order and receipt evidence. A two-way match compares the invoice with the PO. A three-way match also compares the invoice with evidence that the goods or services were received.

Check:

• Supplier identity and approved status
• Invoice number, date and legal entity
• PO or contract reference
• Goods or services, quantity and price
• VAT treatment and tax code
• Net, VAT and gross totals
• Currency and payment terms
• Duplicate invoice indicators
• Bank details against the approved supplier record

According to HMRC's VAT record-keeping guidance:³

• VAT-registered businesses must keep normal business records, including purchase invoices, orders, delivery notes and relevant business correspondence where they form part of the business's records.³
• VAT invoices received should be kept in a way that allows them to be found easily, because they provide evidence for recovering input VAT where the conditions are met.³
• Businesses generally need to keep VAT records for at least six years, although the treatment of particular records and other taxes can differ.³

An invoice that doesn't match should enter an exception queue with a reason and an owner. Common reasons include a missing PO, price variance, quantity difference, missing receipt, unapproved supplier, incorrect VAT treatment or changed payment details.

8. Approve the invoice and release payment

After the invoice is valid and exceptions have been resolved, the authorised approver releases it for payment according to the agreed terms and payment run.

Before payment, check:

• The invoice has passed the required matching and approval rules
• The supplier beneficiary is approved
• Any changed bank details were independently verified
• The amount, currency and reference match the approved invoice
• A duplicate-payment check has passed
• The payment date fits the agreed terms and cash plan
• The route, cut-off, fee and expected arrival time are understood
• Any unusual, high-value or first-time payment has received the required second review

The person who changes supplier-bank information shouldn't be the only person approving the payment. Retain the approval, payment instruction, confirmation and final settlement status with the invoice and PO records.

For international suppliers, the payment stage may also require a check of the beneficiary's legal name, local account details or IBAN, SWIFT/BIC where relevant, payment currency, conversion cost, intermediary charges and expected delivery time.

Why is procure-to-pay important?

P2P creates one chain of evidence from business need to cash leaving the business. It helps answer who requested the purchase, who approved it, what was ordered, what was received, whether the invoice matched and why payment was released.

According to CIPS's procure-to-pay process guide:¹

• A controlled P2P process can help reduce errors and manual processes.
• It can help approve suppliers quickly, control and improve spend, and make better use of negotiated sourcing terms.¹

The practical benefits include:

P2P doesn't remove judgement. It makes the points that need judgement more visible and gives the reviewer the evidence needed to make a decision.

How can a UK business improve its P2P process?

Start with the current process rather than selecting software immediately. Map every hand-off from request to payment, including emails, spreadsheets, shared inboxes, approval tools and manual re-keying. Then measure where requests wait, where invoices fail matching and why suppliers are paid late.

Use the following improvement plan:

1. Set clear approval thresholds

Publish who can approve which value, category and risk. Include a route for urgent purchases so a genuine emergency doesn't become a reason to bypass the process. Make the approver's responsibility clear rather than sending every request to a long chain of people.

2. Make purchase orders practical

Set out when a PO is mandatory and document exceptions for items such as utilities, rent, statutory charges or other recurring costs where a PO may not fit the commercial arrangement. Monitor the percentage of spend and invoices covered by POs.

3. Control supplier data

Keep legal name, address, tax information, bank details, currency and payment terms in a controlled record. Restrict who can amend sensitive fields, retain the change history and require independent verification for bank-detail changes.

4. Standardise receiving

Give operational teams a simple way to confirm delivery, service completion, rejection or a partial receipt. The receiving record should be created close to the event, not weeks later when accounts payable asks whether the invoice can be paid.

5. Automate matching and exception routing

Use technology to capture invoice data, match routine invoices and route exceptions. Keep the rules narrow enough to prevent invoices with missing evidence, unusual prices, changed bank details or high-risk payment destinations from moving automatically.

6. Connect procurement, AP and the ledger

Use common identifiers for suppliers, requisitions, POs, receipts, invoices and payments. If systems can't integrate directly, define the digital link, data owner and reconciliation step so the audit trail doesn't depend on an individual spreadsheet.

7. Review payment performance

Track first-time match rate, exception rate, exception age, invoice cycle time, on-time payment, duplicate rate, spend under contract and the proportion of spend covered by POs.

The Fair Payment Code provides a UK reference point for payment performance. Its Gold Award criteria include paying at least 95% of invoices within 30 days, while lower tiers use longer timeframes and additional small-business criteria.⁵ This is a benchmark for participating businesses, not a universal payment deadline for every organisation.

8. Train requesters and suppliers

Explain what information requesters must provide, when they need a PO, how receiving is confirmed and where suppliers should send invoices. A short buying guide with examples can be more effective than a long policy document that nobody uses.

What are the common P2P risks?

Most P2P risks occur at hand-offs, where information is incomplete or responsibility is unclear.

Warning signs include urgent requests, round-sum invoices, unfamiliar payment destinations, unexpected changes to bank details, repeated manual overrides and pressure to skip an approval. These signals don't prove fraud, but they justify a second check before funds are released.

How does P2P differ from source-to-pay and order-to-cash?

Procure-to-pay is one part of the wider procurement and finance landscape.

S2P includes procurement activity before the transaction, such as sourcing, tendering and contract management. P2P focuses on the operational purchase and payment cycle. O2C runs in the opposite commercial direction and helps a business manage money coming in from customers.

How does e-invoicing fit into P2P in the UK?

E-invoicing can provide structured invoice information directly between the supplier's and buyer's financial systems. That can reduce manual entry and improve the quality of data available for matching, coding and posting.

According to GOV.UK's electronic-invoicing consultation response:⁴

• E-invoicing is the digital exchange of invoice data directly between buyers' and suppliers' financial systems, even where those systems differ.
• The UK government plans to introduce mandatory e-invoicing for all VAT invoices from 2029 and says it will publish an implementation roadmap at Budget 2026.⁴
• A PDF, Word document, image or OCR output isn't automatically an e-invoice in the sense described in the consultation response.⁴

E-invoicing can improve the input to a P2P workflow, but it doesn't confirm that the goods were received, the price is correct, the supplier is approved or the payment should be released. Keep the matching, approval, fraud and reconciliation controls around the structured data.

How can Wise Business support international P2P payments?

When an approved P2P transaction involves an overseas supplier, the payment team may need to manage a different currency, beneficiary details, payment route, timing and exchange cost.

Wise Business can support the payment stage for eligible UK businesses.

Our batch payments tool can help create and send multiple supplier payments together, while our accounting software connections can support transaction reconciliation.

These are just some examples of Wise Business account features that can connect help you connect an approved invoice to an international payment process while leaving the important P2P controls with your business: supplier verification, invoice matching, approval, beneficiary checks and reconciliation.

Wise Business offers a free Essential plan for basic spending and transferring. If you need to receive money, set up direct debits, or generate invoices, you'll pay a one-time £50 setup fee to unlock the Advanced features.

With Wise Business, you can:

• 🌍 Send money to 70+ countries and pay overseas invoices at the mid-market exchange rate with low, transparent fees and no hidden exchange rate markups (product availability varies by region)
• 📥 Receive payments in 24 currencies and counting
• 💵 Get local account details for 8+ currencies, including USD and EUR, to let your customers pay in a currency they know and trust - convenience for them and peace of mind for you
• 💰 Hold money in 40+ currencies
• 🔁 Convert currencies anytime at the mid-market exchange rate with low, transparent fees
• ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer
• 👥 Run payroll and make international payments for up to 1,000 employees all over the world - including paying suppliers using local payment methods like ACH, SEPA, and Faster Payments
• 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world, with real-time visibility and categorisation. See full cashback terms and conditions
• 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)
• 🧾 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more
• 🔐 Create your own payment approvals process to manage your team better with customised access for different team members, roles and permissions
• 📑 Create custom professional invoices and schedule invoice payments for future dates
• 📈 Earn variable returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Rates vary by country and currency. Rates are variable. Visit Wise Interest to find out more)
• 🔗 Create payment links and QR codes to get paid easily (Card payment acceptance for new Wise Business customers is currently unavailable. Payment methods subject to eligibility and availability.)
• ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for your domestic and global needs.

Be Smart, Get Wise.

Register for Wise Business ✍️

**Investments are not guaranteed, and your capital is at risk.

Wise is an Electronic Money Institution (EMI), so features like Interest and Stocks may be covered by the Financial Services Compensation Scheme (FSCS). For standard cash balances, we safeguard your funds to meet regulatory obligations.

In the UK, Interest and Stocks are provided by Wise Assets, the trading name of Wise Assets UK Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA number 839689).

We do not provide investment advice, and taxes may apply. If unsure, seek qualified financial advice. Full fund information is available on our website.

FAQs

Is P2P part of SAP?

P2P is a business process rather than a product owned by one provider. Enterprise software suites can support procurement, approvals, receiving, invoice matching and payment through connected systems. Other procurement, accounting and ERP platforms can support the same process.

What are the 12 steps of the P2P cycle?

There isn't a universal 12-step model. A detailed version may split the workflow into identifying the need, checking the budget, raising the requisition, selecting and onboarding the supplier, approving the request, creating and approving the PO, receiving the goods or services, capturing the invoice, matching it, resolving exceptions, approving payment, paying and reconciling. The important point is that each hand-off has a clear owner and control.

What is a three-way match in P2P?

A three-way match compares the purchase order, receipt record and supplier invoice. It helps confirm that the business ordered the goods or services, received them and is being charged the agreed amount before payment is released. A two-way match compares the PO and invoice and may suit some services or low-risk categories when the policy is explicit.

What is the difference between P2P and accounts payable?

Accounts payable is the finance function that records and pays supplier invoices. P2P is the wider process that starts before the invoice, with the business need, requisition, sourcing, approval, purchase order and receipt. AP is therefore an important part of P2P, but it doesn't cover the whole cycle alone.

How can P2P help small businesses?

A small business may use a simple approval form, purchase order, receipt record and accounting checklist rather than a large integrated platform. The same control logic still helps: approve the spend, use reliable supplier details, record what was received, match the invoice and retain payment evidence.

Is P2P the same as purchase-to-pay?

The terms are often used interchangeably. Some organisations use procure-to-pay for a broader process that includes sourcing and supplier selection, while purchase-to-pay describes the transaction from requisition or order to payment. Check the definitions in your own process documentation.

How should a business handle international supplier payments within P2P?

Add currency, beneficiary, payment-route, fee and timing fields to the approval and payment stages. Verify the supplier's bank details independently, confirm who bears intermediary or receiving-bank charges and retain the conversion and payment evidence with the invoice. The payment provider shouldn't replace your purchasing, matching or approval controls.

Does P2P require a purchase order for every expense?

Not necessarily. A business may document exceptions for recurring expenses such as utilities, rent or statutory charges, depending on its policy and risk. The exception should still have an approved owner, clear evidence and a route for invoice matching and payment.

Sources:

1. Procure To Pay Process (P2P) - Definition & Guide | CIPS
2. Procure to pay (part 4) - GOV.UK
3. Record keeping (VAT Notice 700/21) - GOV.UK
4. Promoting electronic invoicing across UK businesses and the public sector: consultation response - GOV.UK
5. Code Criteria - The Fair Payment Code

Sources last checked on 1 September 2026