What is Procure-to-Pay Cycle?
The procure-to-pay (P2P) cycle covers all the steps an organization takes from identifying a procurement need to paying the supplier. It spans need identification, vendor selection, purchase requisition, purchase order, goods receipt, invoice processing, three-way match, accounts payable approval, and payment. Strong P2P controls reduce fraud, overpayments, and duplicate invoices.
How It Works
- Purchase requisition and approval per delegation of authority.
- Vendor selection and purchase order issuance.
- Goods or service receipt and quality verification.
- Supplier invoice receipt and three-way match (PO, GRN, invoice).
- AP approval, payment scheduling, and remittance reconciliation.
Saudi Context
Saudi P2P cycles must integrate ZATCA-compliant supplier tax invoices, GOSI-related supplier checks for service providers, and WPS-aligned payments where labor is involved. Qoyod integrates AP, PO, and inventory modules so the three-way match is automated. ZATCA’s e-invoicing means tax invoices arrive in structured XML, simplifying matching.
Example
A manufacturer issues a PO for SAR 250,000 of raw materials. Goods arrive and are inspected (GRN). The supplier sends a ZATCA-cleared e-invoice for SAR 250,000 + 15% VAT. Qoyod auto-matches PO, GRN, and invoice, AP approves, and the payment is scheduled for the 60-day net term, posting Dr Inventory 250,000 + Dr Input VAT 37,500, Cr AP 287,500.