This week we focus on understanding various functions and processes under them.

We start with Procure to Pay. This function is the most sought after function and one of the best candidates for outsourcing / moving to a back office. This function is also commonly referred to as the “Accounts Payable” or “AP” function. Procure to Pay relates to the purchase function of an organization. Simply for an accountant – you debit purchase account and credit the vendor or cash / bank for cash purchases. For larger organizations, this devolves in a much larger and specialized context. This starts from the time an organization plans to buy something, whether for own consumption or for trading, up to the stage when the payments are made to the vendor. Some standard processes are listed below:

  • Procure to Pay
    • Invoice Processing
    • Vendor Maintenance
    • Travel & Entertainment
    • Employee Expense Processing
    • P Card administration
    • Exception Management
    • Payment Administration
    • Payment Processing
    • Vendor query handling
    • Vendor Dispute Management
    • Reporting
    • Spend analysis
    • Spend market analytics
    • 2 way/3 way matching
    • Purchase Order management
    • Compliance reporting
    • Vendor Contract Management
    • Payment Settlement
    • Vendor analysis and reporting
    • Sourcing & requisitioning
    • Query Management
    • Vendor Account reconciliations
    • Accounting for purchase returns
    • Dispute Management

 Different organizations treat procure to pay differently. Some organizations segregate procurement from payables, some combine the two together. So you could see a separate procurement department and a separate accounts payable department. Then you could also see segregations between day to day transactions and capital transactions, like purchase of manufacturing equipment. These would have different funding and approval requirements and accordingly be segregated.

One of the premium sites for accounts payable is which can be referred to as well. This will give you the vastness of this function. I will get into further details at a later point in time.