P2P cycle stands for Procure-to-Pay cycle
It is the end-to-end process of buying goods or services and paying the vendor
It starts with identifying a business need
A purchase requisition is created and approved
A purchase order is generated and sent to the vendor
The vendor delivers the goods or services
The receiving team confirms receipt of goods or completion of service
The vendor sends an invoice
The invoice is matched with the purchase order and goods receipt
Any discrepancies are resolved
The invoice is approved for payment
Payment is processed to the vendor
The transaction is recorded in the accounting system
The main goal is to ensure accurate, timely, and controlled payments
It helps maintain compliance, reduce errors, and manage cash flow
Common controls include approvals, three-way matching, and vendor validation