It usually starts with a phone call.
A supplier is chasing an overdue invoice. Accounts Payable can’t pay it because it doesn’t match a purchase order. The business swears they “approved it ages ago”. Someone forwards an email chain. Someone else screenshots a Teams message. The invoice gets paid eventually—often with a side serving of frustration, late fees, or a strained relationship.
If you’ve lived this once, you’ve lived it a hundred times.
Procure-to-Pay (P2P) is one of those unglamorous capabilities that quietly decides whether procurement savings hold, whether Finance has control of cash, and whether your organisation feels easy or painful to do business with.
Done well, P2P creates a calm, predictable operating rhythm:
- People buy what they need, from the right suppliers, at the right price
- Approvals happen quickly and transparently
- Suppliers submit invoices in a consistent format
- Receipts are captured properly
- Invoices match automatically
- Payments go out on time, with clear remittance
- Spend data becomes trustworthy—so procurement can actually manage it
Done poorly, it turns into a permanent work-around: approvals via email, “urgent” supplier setup requests, missing GRNs, duplicate invoices, and a procurement policy that only exists in a PDF.
This article is a practical Australian guide to P2P processes and technology—what good looks like, what typically breaks, and how to approach improvement without creating a clunky system that people dodge.
If you’re already scoping a program, you might also find this related Trace insight useful: Procure to Pay Systems: From Business Case to Selection and Implementation
What is Procure-to-Pay (P2P)?
Procure-to-Pay is the end-to-end process that governs how an organisation:
- Identifies a need
- Requests and approves spend
- Sources from the right supplier (and contract)
- Issues a purchase order (PO)
- Receives goods/services
- Processes invoices (including matching)
- Pays suppliers
- Captures data for reporting, control, and continuous improvement
Think of P2P as the bridge between Procurement and Finance. If the bridge is shaky, procurement benefits fall into the river and Finance is left chasing paperwork.
For a broader view of procurement capability (beyond systems), see: Procurement Consultants Australia | Trace Consultants
Why P2P matters more than most people admit
1) It protects savings
Strategic sourcing can deliver great headline wins—but without buying compliance, those wins leak. People revert to old suppliers, off-contract pricing creeps back in, and “one-off” purchases multiply.
A well-designed P2P pathway makes the right buying behaviour the easiest buying behaviour.
2) It reduces avoidable operating cost
Manual invoice processing is expensive in every way that matters: labour time, rework, exceptions, and delays. The hidden cost isn’t just AP—it’s the time your operational teams spend answering basic questions like: “Who approved this?” and “Did we receive it?”
3) It improves control and audit outcomes
P2P is where delegations of authority, segregation of duties, and evidence of approval either exist—or don’t. Many audit issues are really P2P issues.
4) It improves supplier relationships (and supply continuity)
Suppliers remember who pays late. They also remember who is consistent and easy to deal with. In tight markets, supplier goodwill is a genuine advantage.
5) It unlocks better data (so procurement can act like procurement)
If you want reliable spend analytics, contract compliance reporting, and supplier performance management, you need clean transactions—and P2P is where that cleanliness is created.
The “plain English” version of a good P2P process
Let’s walk the end-to-end flow. As you read, notice where your organisation relies on people’s memory, emails, or goodwill. That’s where the process is likely to break.
Step 1: Demand intake (the moment buying starts)
This is where someone realises they need something: a contractor, spare parts, software, cleaning services, uniforms, freight, a project trade, or a one-off piece of equipment.
Good looks like:
- Clear buying pathways (catalogues, panels, preferred suppliers, rate cards)
- Simple guidance for “what do I do when it’s not in catalogue?”
- Minimal friction for low-risk, low-value purchases
- Strong guardrails for high-risk, high-value, or regulated spend
Common failure mode:
People start by emailing a supplier directly “to get something moving”, and the organisation spends the next month trying to reverse-engineer approval and compliance.
Step 2: Requisition and approvals (delegations that work in the real world)
Approvals are where P2P either becomes a control system or a bottleneck.
Good looks like:
- Delegations of authority embedded into workflow (not a PDF)
- Approvals aligned to cost centre and budget owner
- Clear separation of requester / approver / receipter
- Mobile approvals for leaders who are rarely at a desk
- A fast path for urgent operational needs (without bypassing governance)
Common failure mode:
Approvals live in inboxes. A manager is away. Someone pushes through an invoice “because the supplier is angry”. Control is lost.
Step 3: Sourcing and supplier selection (guided buying, not guesswork)
Not every purchase needs a tender—but every purchase should have a deliberate path: preferred supplier, panel, quote, RFQ, or strategic sourcing event.
Good looks like:
- Guided buying that nudges users to preferred suppliers and contracts
- Catalogue and non-catalogue buying designed to cover the reality of indirect spend
- Clear thresholds for quotes and competitive engagement
- Contract and rate visibility at the point of purchase
If you’re building out procurement governance and go-to-market capability alongside P2P, this is a good companion read: Procurement Market Engagement and Contract Management in Australia
Step 4: Purchase order creation (the hinge point)
For many organisations, the PO is the single most important control artefact in the entire P2P chain.
Good looks like:
- POs issued for the majority of addressable spend (especially services and indirects)
- POs with meaningful detail (scope, rates, milestones, service periods)
- Controls for PO changes (and a clear audit trail)
- “No PO, no pay” applied pragmatically—not dogmatically
Common failure mode:
POs are optional, or they’re created after the invoice arrives. Matching becomes impossible, and AP becomes a detective agency.
Step 5: Receiving goods and services (the most neglected step)
Receipting is essential for three-way matching—but it’s also one of the least loved steps in busy operations.
Good looks like:
- Receipting designed to be quick (scan-based where possible)
- Service receipting aligned to milestones or time periods
- Clear ownership (who receipted, when, and what exceptions exist)
- A process that matches the actual operating model (sites, projects, remote teams)
Common failure mode:
Goods arrive, get used, and no one records receipt. Then the invoice can’t be paid because there’s no evidence the organisation received anything.
Step 6: Invoice capture and validation (where automation should shine)
This is where technology can do real heavy lifting—if the upstream steps are strong.
Good looks like:
- Supplier invoice submission via portal, eInvoicing, or consistent channels
- Automated capture (not re-keying)
- Clear validation rules (ABN, bank details, PO reference, tax)
- Duplicate detection and exception handling workflows
Step 7: Matching and exceptions (three-way match is the goal, not the religion)
Matching is often described as:
- 2-way match: PO vs invoice
- 3-way match: PO vs receipt vs invoice
The right approach depends on risk, category, and operating reality.
Good looks like:
- High “straight-through processing” rates for low-risk invoices
- Clear exception reasons (price variance, quantity variance, missing receipt, missing PO)
- Fast exception resolution with accountability (not endless back-and-forth)
- Tolerances that are intentional and risk-based (not random)
Step 8: Payment and supplier communications (your reputation in one step)
Late payments are rarely caused by the bank. They’re caused by messy upstream steps.
Good looks like:
- Payment terms applied consistently
- Visibility of payment status for suppliers
- Clean remittance advice
- A supplier experience that reduces follow-up calls
The technology stack behind modern P2P
“P2P technology” isn’t one thing. In most Australian organisations, it’s an ecosystem that might include:
1) ERP (the system of record)
This is where the general ledger, vendor master, and payments typically live.
2) eProcurement / guided buying
Where users create requisitions, access catalogues, and route approvals.
3) Supplier onboarding and portal
To manage supplier setup, compliance documentation, bank details, insurance, and invoicing channels.
4) Contract lifecycle management (CLM)
So buyers can link purchases to contracts, rate cards, and agreed terms.
5) Invoice automation / AP automation
Capture, validation, matching, and workflow.
6) eInvoicing
Where it fits, it can reduce errors and speed up processing by standardising the way invoices are received.
7) Spend analytics
Dashboards, compliance reporting, savings tracking, and category insights.
8) Workflow and low-code enablement
Useful for filling gaps—intake forms, approvals, exception triage, and integrations—without waiting a year for an IT release.
If your organisation is also trying to write robust requirements and avoid “vendor-led design”, this insight is relevant: Developing Effective Functional Briefs for Supply Chain & Procurement Technology
And for Trace’s broader technology enablement approach, see: Technology | Trace Consultants
What makes a P2P system succeed (hint: it’s not the demo)
Most P2P programs don’t fail because the software is bad. They fail because the organisation expects software to fix broken decisions.
Here are the success factors that consistently matter.
1) “Guided buying” beats policing
If users have to fight the system to do their job, they’ll bypass it. Good P2P design makes the compliant path the easiest path: preferred suppliers, clear categories, pre-approved catalogues, and simple approval rules.
2) Master data is a first-class workstream
Supplier master data, contract data, chart of accounts, cost centres, tax settings—this is not admin. This is the foundation. Bad data creates invoice exceptions, payment errors, and risk.
3) Services procurement needs special attention
Goods are easier: you can receive them. Services are trickier: you’re receipting time periods, milestones, and outcomes.
A surprising amount of AP pain sits inside:
- labour hire and contractors
- cleaning, security, maintenance
- professional services
- facilities management
- projects and trade services
If those categories matter to you, you’ll want service receipting, statement-of-work discipline, and sensible controls around variations.
4) Policy and delegations must be embedded, not referenced
If someone needs to open a policy document to know what to do, you’ve already lost. The system needs to bake the rules into workflow.
5) Change management is operational, not “training”
People don’t resist P2P because they hate governance. They resist because the process feels slower than email.
The best change programs:
- reduce steps for common purchases
- clarify who does what
- give site teams a fast, workable process
- measure adoption in plain metrics (not just “users trained”)
The KPIs that tell you if P2P is healthy
If you only track “how many invoices were processed”, you’ll miss the story. Strong P2P reporting usually includes:
- % spend on contract / preferred suppliers
- % invoices with a PO (and % without)
- Straight-through processing rate (touchless invoices)
- Invoice cycle time (received → approved → paid)
- First-pass match rate
- Exception rate and top exception reasons
- Duplicate invoice rate
- Supplier inquiry volume (a quiet indicator of friction)
- Cost to process an invoice (trend matters more than the absolute number)
- Maverick spend (off-contract, non-compliant)
These metrics are also the “language bridge” between Procurement and Finance—useful for governance that doesn’t descend into opinion.
A realistic P2P improvement roadmap (that doesn’t blow up the business)
You don’t have to boil the ocean. A pragmatic approach often looks like this:
Phase 1: Stabilise the basics (and remove obvious leakage)
- Clarify buying channels and preferred suppliers
- Tighten supplier onboarding and master data controls
- Improve PO discipline for high-risk/high-value categories
- Redesign receipting for services and recurring spend
- Reduce invoice exception volume with simple rule fixes
Phase 2: Enable and automate
- Implement guided buying and catalogues where they’ll be used
- Deploy invoice automation with sensible tolerances
- Integrate contracts to POs and buying channels
- Build exception workflows that shorten cycle time
- Improve reporting so compliance is visible
Phase 3: Lift maturity and sustain
- Embed category management and contract compliance rhythms
- Build supplier performance and governance into BAU
- Expand catalogue coverage and self-service
- Use data to target the next wave of opportunities
If your P2P uplift is part of a broader procurement modernisation effort, this is a strong companion read: Procurement Modernisation & Strategic Sourcing
A published example of why P2P matters after sourcing
One of the most common procurement frustrations is this: the sourcing work delivers savings, but the business doesn’t hold the line.
Trace has published an anonymised example where a major hospitality and entertainment group reduced property services spend by ~24% through scope optimisation and a structured go-to-market approach. The outcome wasn’t just lower cost—it was clearer accountability and a more sustainable operating model. (You can read it here: How to Reduce Property Services Spend through Smarter Scoping and Go-To-Market Strategy)
This is where P2P becomes the “value protection layer”. Strong buying pathways, contract alignment, and clean invoice controls help ensure savings don’t quietly evaporate six months later through off-contract variations and inconsistent approvals.
How Trace Consultants can help
P2P sits in the messy middle between Procurement, Finance, IT, and Operations. It needs a partner who can handle process detail, technology choices, and operational reality—without turning the program into a theoretical exercise.
Trace Consultants supports Australian organisations across the full P2P lifecycle:
1) Diagnose what’s really happening (not what the policy says)
We map the true end-to-end process, quantify pain points (cycle time, exception drivers, leakage), and identify where controls are failing or creating unnecessary friction.
Start here: Procurement | Trace Consultants
2) Redesign P2P processes that operators will actually use
We help design:
- buying channels and guided buying pathways
- approval workflows aligned to delegations
- practical receipting (especially for services)
- exception handling that shortens cycle time
- policy and controls embedded into day-to-day work
3) Build business cases that stand up to Finance
Technology investment should be justified with measurable outcomes—reduced AP effort, reduced leakage, better compliance, improved supplier experience, and stronger audit outcomes.
Related reading: Understanding Procurement Transformation
4) Select technology that fits your operating reality
We’re system-agnostic. We help define requirements, evaluate options, and avoid the trap of choosing a solution that looks great in a demo but struggles with your category mix, sites, or service purchasing complexity.
Explore: Technology | Trace Consultants
5) Deliver implementation support that keeps momentum
P2P implementations live or die on adoption. We support program governance, configuration decisions, testing, cutover planning, training, comms, and hypercare—so the new process becomes business-as-usual.
If you want to understand Trace’s broader approach and what makes it different, see: Why Us
6) Sustain benefits with practical analytics and rhythms
Once the system is live, we help establish reporting, compliance rhythms, and a pragmatic governance cadence that keeps the process healthy—and continuously improving.
You can also explore Trace’s broader capability toolkit here: Services and Solutions
If you’re considering a P2P uplift, selection, or remediation program, the simplest next step is a short conversation: Contact Trace
P2P quick checklist: “Are we set up to win?”
If you want a fast self-assessment, answer these honestly:
- Can most users buy common items via guided pathways (catalogue, panels, preferred suppliers)?
- Do we have clear rules for non-catalogue buying that people follow?
- Are delegations embedded into workflow (and are approvals timely)?
- Do we issue POs for most addressable spend—especially services?
- Is service receipting designed to match how work is delivered?
- What % of invoices are touchless (straight-through)?
- What are our top five exception reasons—and do we fix root causes?
- Are suppliers onboarded with the right compliance checks and clean master data?
- Do we have simple, trustworthy reporting on compliance and leakage?
If several of these are “no”, you don’t need more policy. You need a better P2P system—process and technology together.
FAQs: Procure-to-Pay processes and technology
What is the difference between procurement and procure-to-pay?
Procurement covers the broader capability: category management, sourcing, contracting, supplier management, and value delivery. Procure-to-pay is the transactional backbone that turns those decisions into compliant purchasing, receipting, invoicing, and payment.
Do we need a P2P system to improve P2P?
Not always. Many organisations can unlock meaningful improvement by fixing buying pathways, approvals, receipting, and master data first. But technology becomes a strong force multiplier once the process is sound—especially for invoice automation and guided buying.
Why do invoices get stuck in AP?
The most common reasons are missing POs, missing receipts, price/quantity variances, poor invoice quality, inconsistent supplier setup, and unclear ownership of exceptions. Technology helps, but only if the upstream steps are working.
What’s the best way to lift compliance without annoying the business?
Make the compliant path the easiest path: guided buying, preferred suppliers at point of request, fast approvals, and clear options for “non-standard” needs. Policing is expensive; good design is cheaper.
How long does a P2P uplift take?
It depends on scope. Targeted process fixes can show impact quickly. Full system selection and implementation is a bigger journey—especially with integrations, change management, and services procurement complexity. The key is sequencing: stabilise, enable, then lift maturity.
Closing thought
A strong P2P capability isn’t about being bureaucratic. It’s about making it easy for people to buy what the organisation actually wants them to buy—while giving Finance the control, visibility, and auditability it needs.
If your P2P process currently relies on emails, heroics, and “please approve this urgently”, that’s not a culture problem. It’s a design problem—and it’s fixable.
When you’re ready, Trace can help you design and implement a procure-to-pay engine that works in the real world—and keeps working after go-live. Start here: Contact Trace
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