Procure-to-pay

7 Best practices in procure-to-pay: cut costs & gain control

The procure-to-pay (P2P) process goes beyond managing processes and spending. It serves as a strategic framework that positions procurement as a key driver of financial and business success. When optimized, it aligns procurement decisions with business goals, resulting in smoother operations and stronger financial control. Yet, common challenges such as manual errors, delays, lack of transparency, and compliance risks lead to missed opportunities.

In this blog post, we’ll explore seven procure-to-pay best practices for streamlining your P2P process. Learn how these strategies can reduce costs, enhance control, and empower your team to achieve procurement efficiency. 

Why you should improve your procure-to-pay process

A well-optimized P2P process doesn’t just reduce costs. It also drives operational efficiency, enhances compliance, and provides spending insights. Here's why implementing procure-to-pay best practices is essential:

  • Time efficiency: Optimized workflows speed up every stage of the cycle, from purchase requisitions to invoice approvals. Faster approvals and fewer delays increase productivity, mitigate the risk of late payments and penalties, while freeing up your team to focus on high-value tasks like supplier negotiations and strategic planning.
  • Cost savings: By establishing and enforcing procurement policies, an optimized P2P process reduces overspending, eliminates unauthorized purchasing and overpayment due to invoice discrepancies. This ensures that every dollar spent aligns with organizational goals and maximizes budget compliance.
  • Risk reduction: Compliance checkpoints reduce exposure to risks and fraud. By maintaining a centralized digital record of procurement activities, your organization is always audit-ready and equipped to handle external regulations.
  • Strategic impact: Greater visibility into spending patterns, supplier performance, and procurement data leads to informed decision-making. These insights enable your team to refine budgets, forecast spending, improve processes and uncover cost-saving opportunities, and fuel bottom line growth.

7 proven best practices for procure-to-pay success

Let’s explore the best practices you can implement to achieve procure-to-pay success.

Following these best practices will help you gain better visibility and control over spending, reduce costs, and optimize procurement process efficiency.

Best practices in procure-to-pay

1. Lay the groundwork with clear procurement policies

Clear and standardized policies are the building blocks of an efficient procure-to-pay process. They provide best practices and structured guidelines for every step of the procurement cycle, ensuring that all team members follow consistent procedures. This reduces confusion, minimizes risks, and promotes compliance across the organization.

Well-defined policies also align purchasing decisions with strategic goals and budgets, allowing procurement and finance managers to make better-informed decisions. This alignment creates a strong framework to leverage technology by deploying P2P automation systems that ensure seamless workflows and greater visibility and control throughout the procurement process. 

Practical steps: 

  • Review your current procurement workflows to uncover inefficiencies and gaps
  • Define roles and responsibilities for each stage of the P2P process to establish accountability
  • Set spending thresholds and approval hierarchies to prevent unauthorized purchases
  • Create standardized vendor selection and approval criteria to ensure quality, compliance, and consistency
  • Review and refine policies on a regular basis to adapt to current business needs and goals

2. Save time and reduce errors with P2P automation

Inefficiencies, errors, and delays are common challenges in manual procurement processes. Automating your P2P process addresses these by accelerating purchase request and invoice approvals, reducing manual data entry time and errors, streamlining invoice matching, and freeing up valuable time for high-priority tasks.

P2P automation not only streamlines workflows but also provides real-time visibility into procurement activities that enable informed decision-making for approvals against budgets and projects, vendor selection and consolidation, and overall process and spend optimizations.

Practical steps:  

3. Set up internal controls 

Internal controls play a critical role in helping companies improve spend control and reduce the risk of unauthorized spending, overpayments, paying for goods not received, and processing duplicate invoices. These controls ensure that purchases are approved, and the subsequent invoices are validated against supporting documents before payments are made, safeguarding your organization from errors, fraud, and overpayments. By confirming that delivered goods and services match the original purchase order, internal controls provide an essential layer of protection for financial accuracy and compliance.

When internal controls are robust, invoice matching becomes a thorough process, preventing costly mistakes. A centralized digital approach enhances it further with easy access to purchasing records, eliminating manual errors and gaining the ability to flag discrepancies in real time speeds up the payment cycle. This not only ensures accuracy but also boosts financial transparency.

Practical steps:

  • Set up approval limits and thresholds with escalating workflows to ensure delegation of authority
  • Require that all new vendors undergo a verification process before being added to the approved list
  • Set up controls to ensure that purchases are within the approved budget
  • Set up alerts that automatically flag discrepancies, ensuring they are resolved swiftly
  • Implement a process where invoices are matched against purchase orders and receiving reports before approval and payment

By relying on internal controls, companies can create a more reliable, transparent, and error-free payment process, ultimately contributing to long-term financial health.

4. Turn spend data into actionable insights

In procure-to-pay, effective spend management starts with data visibility. With a clear view on real-time and historic spending activities, procurement and finance teams can analyze patterns and make informed decisions that drive better outcomes and best practices. 

With P2P solutions that enable spend analysis, finance and procurement managers can obtain useful insights from their spending history. This comprehensive oversight helps reduce non-essential spending, eliminate waste, and improve efficiency, compliance, and saving potential.

Practical steps:

  • Use procure-to-pay software with advanced analytics to track and monitor all spending
  • Regularly review detailed spending reports to uncover trends and opportunities to save and improve processes
  • Identify patterns, inefficiencies, and anomalies to optimize budgets
  • Benchmark your company's P2P performance against peer companies with community insights
  • Leverage data insights to negotiate better supplier terms and eliminate wasteful spending

5. Build stronger supplier relationships for long-term success

Tracking purchasing volumes and vendor performance through data visibility allows you to optimize your procurement strategy and improve supplier relationships. By analyzing spending patterns, you can identify opportunities to consolidate vendors, streamline operations, and negotiate better terms such as volume discounts or early payment incentives.

Better insight into your vendors' performance helps build stronger, more strategic relationships with top suppliers. 

Practical steps:

  • Use purchasing data to track volume, performance, and spending trends across vendors.
  • Consolidate your vendor base to focus on top-performing suppliers that align with your business needs.
  • Leverage insights to negotiate better pricing, discounts, and contract terms, such as early payment discounts or bulk pricing.
  • Regularly evaluate supplier performance and communicate feedback to ensure continuous improvement and alignment with your goals.

By using data to gain a deeper understanding of your suppliers and their performance, you can make more informed decisions that strengthen your vendor relationships, reduce costs, and drive long-term success for your organization.

6. Ensure compliance and mitigate risks

Compliance plays a central role in procurement. Adhering to policies and regulations results in smoother operations, reduces exposure to overspending and fraud, and simplifies audits. A proactive approach to compliance not only protects your organization from risks but also fosters trust with boards, funders, and stakeholders by demonstrating accountability and transparency.

Procurement tools and technology help drive compliance by maintaining a centralized record of all procurement activities, making it easier to identify and address risks.

Practical steps:

  • Automate compliance checks to ensure consistency and accuracy at every stage in the P2P process
  • Schedule regular compliance reports to identify and address potential gaps
  • Leverage automation to provide a centralized, digital trail of all procurement activities and documentation to support audits
  • Make sure your team is up-to-date on the latest policies and regulations to reduce risks

7. Empower your team 

Empowering your team with the right tools is crucial for driving efficiency and accountability in the procure-to-pay (P2P) process. By using systems with access to mobile apps and integrating collaboration tools, you enable your team to manage spending more effectively, wherever they are. Mobile apps, in particular, make it easy for employees to submit requests, approve purchases, and track spending in real time, while collaboration tools foster seamless communication and transparency across departments. Such integrations could include connecting your company's messaging apps, such as Microsoft Teams or Slack.

When team members have the flexibility to access the P2P system on-the-go and collaborate in real time, it ensures that spending is more accountable, and decisions are made faster. This approach eliminates bottlenecks, accelerates approval cycles, and gives managers the visibility they need to maintain control over budgets and expenditures. With the right tools, employees can make better purchasing decisions, prevent unnecessary spending, and keep financial processes smooth and streamlined.

Practical steps:

  • Utilize mobile app-enabled P2P software for access from any location and simplified processes
  • Empower managers to review requests against budgets and approve with confidence, wherever they are
  • Integrate your P2P platform with collaboration tools to fast-track adoption using a familiar tool

By equipping your team with the right technology, you empower them to take ownership of purchasing decisions and contribute to more efficient and accountable spending across your organization.

3 Common mistakes to avoid in procure-to-pay

To have a successful P2P process in place, avoid making these mistakes:

1. Overreliance on manual processes

Manual processes inefficiencies are the most common challenges faced by procurement and finance leaders today. They often result in slow approvals, lost data and records, inaccuracies, and missed payment deadlines, to mention a few. These processes lack visibility and control, exposing organizations to financial and compliance risks.

Transitioning to P2P automation eliminates repetitive tasks, provides data accuracy, and allows teams to optimize processes and spending to drive efficiencies and savings.

2. Poor visibility and control 

Without clear visibility into procurement processes, companies often struggle to manage budgets and control spending, leading to unapproved or unnecessary purchases, missed saving opportunities, and poor vendor management. This lack of oversight creates inefficiencies, hinders financial discipline, and results in a failure to optimize procurement practices.

In addition, failing to enforce procurement policies allows for rogue spending, where purchases are made outside of approved processes. To maintain control over procurement activities and ensure spending is aligned with organizational goals, strong policy enforcement, proactive controls and clear visibility are essential. By implementing these practices, companies can optimize their procurement strategy, reduce costs, and improve financial accountability.

3. Neglecting data-driven decision-making

Failing to use data to inform decisions puts companies at a clear disadvantage. Without gathering and leveraging data, organizations miss valuable insights that could optimize procurement processes, drive cost savings, and strengthen vendor relationships. Making decisions without data leads to missed opportunities, inefficiencies, and increased risks, such as overpaying for goods or working with underperforming suppliers. Without a data-driven approach, companies are essentially operating in the dark, making it harder to stay competitive and make informed, strategic choices.

See real results with Fraxion’s procure-to-pay solution

Procurement inefficiencies like manual workflows, slow approvals, and limited visibility can overwhelm your team and hinder business growth. Fraxion’s procure-to-pay software is designed to eliminate these challenges and implement best practices.

With Fraxion, you gain complete visibility and control at every stage of the P2P process. From purchase requisitions to invoice approvals, Fraxion automates workflows and enforces compliance, reducing errors and delays. Accessible via web, mobile app, or Microsoft Teams integration, Fraxion ensures your team can manage procurement activities efficiently, wherever they are.

Fraxion’s P2P solution simplifies purchasing, expense, and accounts payable processes while helping you stay within budget and policy guidelines. By automating manual tasks and providing robust reporting, Fraxion reduces unauthorized spending and operational costs by up to 20%. With accurate data and centralized records, your organization is always audit-ready and positioned for sustainable success.

Discover how Fraxion’s procure-to-pay software can transform your procurement process from end to end. Contact us today to arrange a customized demo.


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