Invoice-to-Pay (I2P) is a sub-component of a procurement process that particularly focuses on the streamlined management of the payments. In other words, it entails the management of accounts payable operations for supplier payments. An enterprise working with multiple suppliers at the same time needs to implement a well-thought-out I2P process.
Steps of I2P
A carefully planned I2P process involves multiple steps and sub-steps. I2P fundamentally classifies into three segments: invoice approval, payment approval, and payment execution.
- Accounts payable receives an invoice through email or phone and sends it to the relevant department (the internal buyer) for approval. An automated invoice approval system can also be used for this correspondence. The invoice is matched with the shipping receipt and previous POs and then approved if no discrepancies are found.
- The second step is the approval of the payment of the invoiced figure. Different organizations use different mechanisms for payment approval. For instance, some use physical/ in-person signatures of the department heads and executives. Others use an electronic approval process that offers efficiency, transparency, and traceability.
- The last step of I2P is the payment execution where the approved amount is transferred to the supplier through the pre-agreed payment method (wire/ACH transfers, electronic transaction, paper checks, etc).
The Benefit of Streamlined I2P
Timely payment lies at the core of good supplier management practices. An invoice-to-pay process powered by an automated approval system ensures that your enterprise can pay its vendors in time without accumulating a payment backlog.
SimplyPurchasing by Microsys is easy-to-use procurement management software that works on various fronts to improve organizational performance. It improves the procurement process and helps get a better hold of supplier payment through its impressive PO creation and vendor management features. The use of SimplyPurchasing can also help you improve your I2P process.