Procure to Pay Process: Steps, Documents and How to Automate It

The procure to pay process (P2P) is the sequence of steps a company follows from the moment someone needs to buy something to the moment the supplier is paid and the payment is reconciled. For a manufacturer or distributor it runs through requisition, sourcing, purchase order, supplier acknowledgement, receipt of goods, supplier invoice and matching, approval, payment and reconciliation. Each step starts with a document, and each document has to land on the right screen in the ERP before the next step can begin.

This guide walks through the procure to pay cycle step by step, names the document that arrives at each stage and where it lands in Epicor Kinetic, and shows where automation applies, what to measure and where the process usually breaks. Its sister cycle on the selling side is the order to cash process, which runs from customer quote to cash applied.

The procure to pay steps

1. Requisition

A need is raised: MRP suggests a purchase for a job or a stock replenishment, a buyer sees a part below its reorder point, or someone in maintenance or the office asks for supplies. In Epicor Kinetic, planned purchases surface as purchasing suggestions, and ad hoc requests go through Requisitions, where they are routed for approval before a buyer acts on them. Purchases that skip this step (a phone order, a card swipe) arrive later as invoices with no purchase order behind them.

2. Sourcing and supplier quote

For parts without an agreed supplier and price, the buyer asks one or more suppliers for a quote. In Epicor Kinetic this is RFQ Entry. Supplier quotes come back as PDFs, emails and spreadsheets with the supplier's own part numbers, units, price breaks and lead times, and someone compares them and records the winning price. For repeat parts, a supplier price list stands in for this step.

3. Purchase order

The buyer issues a purchase order in PO Entry: supplier, lines, quantities, unit of measure, price, due dates and, for materials bought for a job, the job and operation they feed. Many POs start from documents too: a supplier quote, an emailed request from production, a spreadsheet of replenishment lines. The PO is the reference every later step matches against, so an error here (wrong unit, wrong price, wrong supplier part) surfaces at receipt or at invoice.

4. Supplier acknowledgement

The supplier confirms the order, often with changes: a different promise date, a substituted part, a price that no longer matches, a split shipment. The acknowledgement arrives by email or PDF, sometimes by EDI, and the confirmed dates and prices should be updated on the PO in PO Entry. When they are not, planning works from dates the supplier never promised and the invoice later disagrees with the PO.

5. Receipt

Goods arrive with a packing slip. The receiving dock records what arrived against the PO release in Receipt Entry: quantity, unit, lot or serial numbers, and whether it goes to stock, inspection or a job. Packing slips use the supplier's part numbers and units, may cover several POs, and often ship short or over. Receipts that are not entered promptly hold up everything after them, because the invoice cannot be three-way matched against goods the ERP does not know arrived.

6. Supplier invoice and matching

The supplier invoice arrives, usually as a PDF attached to an email, and AP enters it in AP Invoice Entry. Matching is the control at this step:

• Two-way matching. The invoice is compared with the purchase order: right supplier, right lines, quantity and price as ordered. It suits services and items where there is no physical receipt.
• Three-way matching. The invoice is compared with the purchase order and the receipt: you pay only for what was ordered and actually received, at the price agreed. It is the standard control for materials and inventory.

Invoices without a PO (utilities, freight, services) are coded to GL accounts instead. Differences in quantity or price become exceptions that someone has to resolve with purchasing or the supplier before the invoice can be paid. Our guide to automating Epicor AP Invoice Entry covers this step in depth.

7. Approval

Invoices that match within tolerance may need no further approval; exceptions and non-PO invoices go to the budget owner or the buyer. Approval is where AP most often waits: invoices sit in someone's inbox, early-payment discount windows close and suppliers call to ask where their money is.

8. Payment

Approved invoices are selected for payment by due date and terms, and paid by check, ACH, wire or card in AP Payment Entry or through a payments platform. The remittance goes to the supplier so they can apply the payment to the right invoices.

9. Reconciliation and reporting

Payments are reconciled against the bank statement (Bank Statement Processing in Epicor Kinetic), supplier statements are checked against the AP ledger, and receipts not yet invoiced are accrued at month end. Finance reviews the AP aging, days payable outstanding and the cash forecast. These reports are only as good as the data keyed at steps 3 through 8.

Step, document and screen at a glance

Where procure to pay automation applies

Procure to pay automation is a set of tools, each covering part of the cycle. Most companies combine several.

• ERP purchasing features. Epicor Kinetic already turns MRP output into purchasing suggestions, routes requisitions, holds supplier price lists and checks invoices against POs and receipts. Use what the ERP already does before buying around it.
• Procurement and purchasing tools. Spend management and procurement platforms handle requisitions, catalogs, supplier onboarding and approval policy. They help most where indirect spend (supplies, services, software) is large and scattered.
• Supplier portals. Suppliers who can be moved onto a portal confirm orders, submit ship notices and upload invoices themselves. That works for large, frequent suppliers and much less for the long tail who will keep emailing PDFs.
• EDI. For suppliers who trade by EDI, purchase orders (850), acknowledgements (855), ship notices (856) and invoices (810) move as structured data. Setup is per trading partner, so it rarely reaches more than the largest suppliers.
• AI document agents. Agents read the documents that arrive in any format (supplier quotes, order requests, packing slips, invoices) and draft the transaction in the ERP screen it belongs to, for a person to review. This is where Fluent sits. It covers the documents portals and EDI never reach.
• AP workflow and payments platforms. Tools such as Stampli, AvidXchange and Tipalti focus on the back half of the cycle: invoice capture, approval workflows and supplier payments. Stampli describes itself as a procure-to-pay platform with procurement, AP and payments; AvidXchange pairs AP automation with a large supplier payment network; Tipalti covers supplier onboarding, tax compliance and global payments across many countries and currencies. If approvals and payment runs are the bottleneck, these are purpose-built. Our AP automation roundup for manufacturers compares them.

The practical split for most mid-market manufacturers: EDI and portals for the suppliers who use them, an AP workflow or payments platform if approvals and payment runs are the bottleneck, and document agents for everything that still arrives as a PDF or an email and gets retyped.

Procure to pay metrics

• Invoice cycle time. Time from the invoice arriving to the invoice being approved for payment (some teams measure to payment). It shows how long invoices queue before anyone works them.
• Cost per invoice. Total cost of the AP function (staff time, tools, outsourcing) divided by the number of invoices processed in the period. Most of it is staff time spent keying and chasing exceptions.
• First-pass match rate. Share of PO invoices that match the purchase order and receipt within tolerance on the first attempt, with no one touching them. It is the clearest measure of upstream data quality: a low rate usually points to POs with wrong prices or receipts entered late.
• Exception rate. Share of invoices that need human intervention: a price or quantity variance, a missing PO or receipt, an unknown supplier. Track it by cause, because each cause has a different owner.
• Days payable outstanding (DPO). Accounts payable divided by cost of goods sold for the period, multiplied by the number of days in the period. It measures how long, on average, you take to pay suppliers. Higher keeps cash longer, but compare against your terms: paying well past terms costs supplier goodwill and pricing.
• Early-payment discounts captured. Discounts taken as a share of discounts offered (for example 2/10 net 30). Missed discounts are usually an approval-speed problem.
• PO coverage. Share of supplier spend (or of invoices) backed by a purchase order raised before the purchase was made. POs raised after the invoice arrives do not count. Low coverage means more two-way exceptions, more non-PO coding and less control over what is bought.

Other useful measures are duplicate payments caught, invoices on hold by age and receipts not yet invoiced.

Common failure points

• Units of measure. You buy in boxes of 100, stock in each and the supplier invoices per thousand. A receipt or invoice entered in the wrong unit is off by a factor of 100 or 1,000, and a match that compares across units is meaningless.
• Supplier part numbers. Packing slips and invoices name the supplier's own part numbers. Someone has to translate every line to yours, and a wrong translation receives or pays for the wrong item.
• Price drift from quote to PO to invoice. If the PO price is not updated after the acknowledgement, the invoice fails the match even though everyone agreed the new price.
• Late receipts. The invoice arrives before the receipt is entered, fails three-way matching and sits on hold, or is paid on a two-way match for goods that never arrived.
• Duplicate invoices and double billing. The same invoice sent by email and by mail, or a second invoice billing a receipt already invoiced. Without a check against what is left to bill, both get paid.
• Unknown or changed suppliers. A new remit-to address or bank detail on an invoice is the classic route for payment fraud. Changes to supplier banking should be verified out of band, never from the invoice itself.
• Retyping between steps. The same line is keyed at PO, again at receipt and again at invoice. Every retype is a chance to introduce an error that surfaces at matching or payment.

Where Fluent fits in procure to pay

Fluent is AI agents that read business documents and draft the transaction in the ERP for a person to review. It is built around Epicor Kinetic, and three of its ten agents cover procure to pay, each named for the Kinetic screen it drafts into:

• PO Entry. Reads vendor quotes and supplier confirmations in any format and drafts the purchase order in PO Entry, with the vendor, payment terms, buyer, lines, units, prices and header charges resolved against Epicor.
• Receipt Entry. Reads packing slips (PDFs, scans, photos taken on the dock) and drafts the receipt in Receipt Entry, with each line matched to an open release on the purchase order, in the unit the supplier shipped.
• AP Invoice Entry. Reads supplier invoices and drafts them in AP Invoice Entry: vendor matched by name and tax ID, two-way and three-way matching against the PO and receipt, quantity checked against what is left to bill, price checked against the order, and every difference shown on the line.

Nothing posts until a person processes the draft. An approval workflow routes each document to the people who sign off on it, with thresholds such as an amount or a price variance deciding who reviews what. Every field read and every decision is recorded on the document. If no vendor matches, the document is drafted with a note of what was searched and waits for a person. There are no templates per supplier, no field mapping and no model training: behaviour is set with written instructions, and corrections become instructions.

Fluent connects to Epicor Kinetic's REST API from outside, with nothing installed inside Epicor, and works on premise or Epicor-hosted. The same agents are offered for other ERPs, including Prophet 21, SAP Business One, NetSuite, Acumatica and Microsoft Dynamics 365; Epicor Kinetic is where it is deepest.

Where it does not fit: Fluent does not pay suppliers, and it is not a procurement suite, a supplier portal or an EDI translator. If your suppliers trade by EDI, keep EDI for them. If the bottleneck is approval routing and payment runs, an AP workflow or payments platform is the better fit, and it can sit downstream of the invoices Fluent drafts. Fluent covers the documents that still arrive as PDFs, scans and emails and get keyed by hand. For a side-by-side view, see the best AP automation for Epicor Kinetic.

See it on your own invoices

Send a real vendor quote, packing slip or supplier invoice and read the draft Fluent produces in Epicor. Start with AP Invoice Entry, see all agents, check pricing, or book a demo.