The Procure-to-Pay Cycle
Learning objective
Explain the procure-to-pay cycle, identify the key AP control or accounting risk, and choose the appropriate response in a realistic situation.
The answer
Procure-to-pay connects the business need, purchasing, receiving, invoice processing, approval, accounting, and payment.
Each P2P step creates information the next step may rely on. Weakness upstream—such as a missing PO or unrecorded receipt—often appears later as an AP exception.
Why it matters
The procure-to-pay cycle matters because poor handling can lead to paying for goods not received or creating repeated downstream exceptions. A controlled, documented process helps AP protect cash, supplier balances, and the audit trail.
A department requisitions 15 laptops. Purchasing issues a PO, Receiving logs 15 units, and the vendor invoices 15 at the PO price. Which statement correctly reflects how procure-to-pay works?