Procure-to-pay covers everything between deciding to buy and settling the bill. For a manufacturer, retailer or distributor, it usually runs through the ERP on the buyer’s side and through many different systems, spreadsheets and inboxes on the supplier’s side. Purchasing, receiving and accounts payable each own a piece of it, and each depends on documents the supplier sends back.
A typical P2P flow with a supplier uses these documents:
- Purchase order (EDI 850) to place the order
- PO acknowledgment (EDI 855) to confirm items, quantities, prices and dates
- PO change (EDI 860) when the buyer changes the order
- Advance ship notice (ASN, EDI 856) to describe what is shipping and how it is packed
- Invoice (EDI 810) to bill for what shipped
P2P runs well when every supplier sends complete, accurate documents on time. In practice, strategic suppliers may exchange EDI while many others confirm orders by email, change dates by phone and send PDF invoices. The gaps show up as missing acknowledgments, ASNs that don’t match the order and invoices that fail the three-way match, which leads to receiving delays, claims and deductions and late payments.