The procure to pay cycle involves an exchange of ‘value’ between a buyer and a seller. With procure to pay automation you achieve automation and optimization across the entire cycle – from requisition, review and approval, and PO creation to vendor selection, purchase, and payment – to name a few key activities.
If you are an enterprise buyer, whether a large global conglomerate or an SME, the value exchanged is typically objective – goods or services, and monetary. This makes the whole cycle highly vulnerable to malpractice and fraud.
The latest February data from PYMNTS Intelligence’s 2025 Certainty Project reveals that procurement frauds are particularly pronounced for mid-market companies operating in high-uncertainty environments, which report 87% higher customer losses due to fraud compared to their low-uncertainty counterparts.
Notably, approximately 71% of respondents in the PYMNTS study cited automation as the most impactful strategy for reducing fraud, compared to 27% who reported staff training as the most impactful.
Let us see how you can leverage procure to pay automation to optimize business processes, increase efficiency, and cut costs.
How Procure to Pay Automation Works
Procure to pay automation brings in a centralized, standardized, real-time record of all documents generated in the cycle, easily accessible and visible to all stakeholders, thereby minimizing risk and mitigating potential fraud and non-compliance.
Non-compliance and fraud in the procure to pay process will lead to wasted resources, poor supplier relations, weak negotiation power, business user dissatisfaction, increased maverick spend, and destabilized budgets.
According to the PwC Global Economic Crime Survey 2024, 55% of respondents reported procurement fraud is a widespread concern in their country, yet only a minority are using available tools to identify or combat it.
Procure to pay automation delivers the desired ROI, reduces fraud, and boosts compliance when done right.
Key P2P processes to automate
Earlier procure-to-pay (P2P) software primarily focused on storing data, struggling to handle fragmented tasks and complex workflows. Today’s P2P automation tools are built to manage all aspects of procurement, with data and information spread across systems and multiple teams.
However, to fully realize the benefits of automation, it’s crucial to choose the right processes to automate. Here are six key areas within the P2P cycle that are especially well-suited for automation:
1. Purchase requisition
Purchase requests need to be validated for accuracy and compliance with internal policies and regulations. When error-prone manual requisition approvals are practiced, it slows the entire cycle leading to delays and faulty PO releases.
Procure to pay automation involves automating this key activity.
Automation ensures requisitions follow predefined workflows and are routed to the appropriate team members for approval. The approvers can approve or reject requests with a single click, marking their comments, which in turn are visible and trackable across the P2P organization.
Approvals can also be automated where the requests are validated with pre-defined rules, rejecting incomplete or inconsistent ones, and notifying the buying/initiating persona in real-time.
Best practices in purchase requisition that ensure compliance and fraud prevention:
- Standardization and centralization
- Prefilled templates for approved vendors and recurring purchases
- Approval matrix with multiple approvers for each level (distributed responsibility)
- Automated spending thresholds and controls to avoid maverick spends
- Clear compliance policies
- Strict and monitored KPIs
2. PO creation
Procure to pay automation solutions effectively automate the entire PO creation process.
Streamlined POs follow standard formats with all necessary information – quantities, specifications, departments/business units involved, and other relevant details. Automation ensures all data are cross-verified, or confirmed, and the business does not lose money through the cracks.
3. Invoice matching and approval
Our customized procure to pay automation solutions using OCR (Optical Character Recognition) make data extraction and matching invoices a breeze. Invoices are auto fetched from emails, portals, and customer systems, and data is extracted and matched with POs, order receipts, and invoices.
By cross-checking these three documents, you can confidently confirm that the items received match what was ordered, quantities are accurate, prices align with agreed terms, and invoices are correctly calculated.
This verification process helps prevent issues such as payments for undelivered goods, incorrect or duplicate payments, unauthorized purchases, and fraud.
Many modern P2P systems now automate much of this process for added efficiency and security. The system compares data and flags discrepancies as soon as they are detected, alerting the procurement team to potential fraud and non-compliance.
With OCR 3-way matching, a clear audit trail is recorded in the system linking PO, GRN, and invoices, making it easy to track, monitor, and manage the P2P cycle. It also automates approval for low-value invoices, avoiding unnecessary delays and manual interventions.
4. Vendor Management
Procure to pay automation simplifies and speeds up the lengthy vendor evaluation process, which can typically take a few weeks in a mid-size business. Modern P2P solutions collect and filter RFQs, carry out verification checks, and match data with the preferred vendor accounts.
This helps with the seamless identification and shortlisting of vendors.
P2P automation ensures you can benefit from a wide pool of vendors, implement favorable bidding policies, drive fair price discovery, achieve optimal prices, and reduce costs.
But it is not only the cost and the measurable factors that need to be considered; there are many intangibles also at play here. This includes the financial stability of the vendor, industry recognitions, regulatory records, and scalability.
Benefits of P2P automation in vendor management:
- Optimized selection of vendors
- Established vendor selection criteria
- Improved KPI monitoring
- Centralized data on suppliers, transaction history, past orders
- Informed decision making
- Better vendor relations
- Better value generation
5. Contract Management
P2P automation offers a significant boost to contract management. Automating and securing contract management systems prevents procurement fraud.
This is because manual and fragmented processes offer plenty of opportunities for potential fraud.
With all supplier data, contract information, and purchasing history located on a centralized, and secure platform, it becomes easy to track expirations, renewals, negotiations, and compliance.
Clean, standardized, consistent, accurate, valid, and complete supplier data will serve as a golden record, helping efficiently manage all parts of the supplier lifecycle.
Organizations can track critical documentation like ISO certifications, bank account details, tax compliance, and insurance throughout a supplier’s lifecycle. This ensures compliance leading to fewer instances of fraud. Suppliers who are compliant with legal and regulatory sanctions, tax legislation, and other mandates mitigate the risk of potential fraud to a great extent.
With procure to pay automation you can:
- Match POs with the right vendor
- Easily cross-compare on-boarded vendors
- Assess contract validity, purchases, payment history, etc.
- Effectively plan budgets
This also helps monitor and improve supplier performance.
With democratic visibility and role-based stakeholder access, chances of manipulation and favoritism are minimized.
6. Accounts Payable
Managing vendor invoices requires close collaboration with the finance team to make strategic payment decisions—such as taking advantage of early payment discounts, negotiating favorable terms, and strengthening supplier relationships. Procure to pay automation helps streamline all these aspects.
For both procurement and finance teams, improving cash flow and reducing costs are top priorities.
Modern P2P solutions empower businesses to optimize payment timing, avoid overspending, prevent fraud and non-compliance, and create win-win outcomes for both buyers and suppliers—while saving time and boosting efficiency.
How outsourcing helps in P2P automation
Outsourcing partners often come equipped with best-in-class P2P automation platforms. Instead of investing heavily in software and infrastructure, businesses can plug into these ready-to-use systems that support e-invoicing, automated approvals, real-time dashboards, and more.
Procure to pay outsourcing service providers adhere to stringent data security and privacy regulations and are compliant to the highest standards like SOC ensuring data protection and cybersecurity.
Outsourcing teams can also scale up and down as per customer needs, ensuring that you have the best and safest hands handling all your P2P data and processes.
With automation and expert support handling transactional tasks, internal finance and procurement teams can shift their focus to strategic supplier relationships, cash flow optimization, compliance, and business planning.
Conclusion
In an increasingly complex regulatory landscape, procure-to-pay (P2P) automation is no longer a nice-to-have—it’s a necessity. By digitizing workflows, embedding controls, and creating real-time transparency, automation helps businesses prevent fraud, reduce human error, and stay audit ready. It not only safeguards your finances but also builds stronger supplier relationships through timely, accurate payments. For organizations looking to future-proof their financial operations, automating the Procure to Pay process is a smart, secure step forward.
