The administrator of a skilled nursing building calls the plumber from the hallway when the dish machine floods on a Saturday. The plumber comes and the kitchen reopens. The following week the bill lands in the business office with no purchase order behind it. The business office manager now has to find out who approved the job and what it was supposed to cost.
Procure-to-pay is the chain of steps that runs from the moment someone in a building needs an item to the moment the vendor is paid and the accounting system holds the record. The steps are requisition, approval, purchase order, receiving, invoice capture, three-way match, payment, and the sync to the accounting system.
The plumber's bill skipped the first four steps, which is why it is hard to handle at the fifth. Each step exists to leave a record the next step checks against.
What are the steps of procure-to-pay?
We draw procure-to-pay in eight steps. The table shows who starts each one and the record it leaves for the next, and our longer procure-to-pay guide takes each step at length.
| Step | Who starts it | What it leaves behind |
|---|---|---|
| Requisition | A department head or nurse who needs the item | A request naming the items and the expected price |
| Approval | The approver named by the operator's rules | A yes or no on the request |
| Purchase order | The buyer or the purchasing system, once the request is approved | A PO number the vendor and the building both hold |
| Receiving | The person who signs for the delivery | A record of what arrived |
| Invoice capture | The vendor, on paper or electronically | The invoice data, line by line, in the AP system |
| Three-way match | The AP system or the AP clerk | A matched invoice, or a flag on the line that differs |
| Payment | AP, on the vendor's terms | A paid invoice with the date and method recorded |
| Accounting sync | The AP system | The invoice and its coded lines in the accounting system |
When procurement and AP sit in two systems that are not connected, or in a system and a spreadsheet, the record from one step can reach the next only by someone re-keying it. The three-way match is where that shows, since the AP clerk has to pull the PO, the receipt, and the invoice together before comparing them. That is also where a three-way match tends to break.
What happens to an invoice with no purchase order?
An invoice with no purchase order has nothing to match against, so someone has to review the price and the work on the invoice itself before the bill is approved. Service and utility bills are a common case, since a plumber called on a Saturday or a monthly gas bill rarely starts as a cart. The first record the business office sees is the invoice itself.
Those bills can still go through the chain without a PO, by sending the invoice itself through approval the way an order would go.
In Adelpo the whole chain sits in one place. Staff build a cart from the vendor storefront, the operator's own approval rules route it, and the approved request becomes a PO. When the delivery comes in, someone confirms the receipt. Adelpo Capture reads the invoice line by line, the match against the PO and the receipt runs on its own, and a price that differs from the order is flagged on the invoice. Vendors are paid by ACH or check. Adelpo connects to Sage Intacct and QuickBooks, and sends NetSuite and other accounting systems an automatic batch of approved invoices. A bill like the plumber's needs no PO in Adelpo. It is reviewed and approved the way a cart is, and the department's budget updates from the invoice.
Questions controllers ask about procure-to-pay
Is procure-to-pay the same as purchase-to-pay?
Yes, purchase-to-pay and P2P name the same chain, from the request for an item through payment of the vendor's invoice and the posting to accounting. Ask any vendor which steps its product covers, since the name alone does not say.
What is the difference between procure-to-pay and accounts payable?
Accounts payable covers the back half of the chain, from invoice capture through payment and the sync to the ledger. Procure-to-pay adds the front half, requisition, approval, purchase order, and receiving, where the price and the approval are set before money is committed. When only the back half runs in software, the invoice is the first record the system sees.
What counts as a requisition in a nursing home?
A requisition is the request for goods before anything is ordered, whether a cart in a purchasing system or a paper form the department head signs. It records the items, the quantity, the expected price, and the person asking, so the approver can judge it before a PO exists.
Does a service invoice go through three-way matching?
Only if a purchase order exists for the service. Without one, the review happens on the invoice itself. In Adelpo a service or utility invoice is approved the way a cart is, without a PO, and it counts toward the department's budget.