The document describes the key steps in a company's procure to pay process. It includes: 1) Material requirement planning to determine needed supplies and when. 2) Vendor selection by comparing quotations. 3) Purchase requisitions, purchase orders, goods receipt, and goods receipt invoicing to receive ordered items. 4) Invoice verification to check prices, quantities, and approvals. 5) Payment to vendors according to terms after all verification is complete. The procure to pay process aims to efficiently obtain necessary items at the right time and cost while ensuring accurate payment for goods and services received.

1. Procure to Pay Process
Presentation by
Anand.M
(Emp.ID : 908)

2. Procure to Pay
Every Organisation that Operates
a business has to Purchase materials
such as raw materials, Services etc. The
Procurement process has become part of
today's efficient bussiness operation. The
Company can procure those materials as
in-house production or External
Procurement.

3. Procurement Process Cycle
Procure to Pay Process consists the following Processes.
 Material requirement planning
 Vendor Selection
 Request for Quotation
 Purchase requisition
 Purchase Order
 Goods receipt
 Goods Receipt Invoice
 Invoice Verification
 Payment to Vendors

4. Material Requirement planning
Material requirement planning(MRP)
refers to the technique of using a projected
manufacturing production schedule to
figure out what supplied materials you will
need, and when you will need them.
Materials requirement planning carried out
by MRP Controller in Production
department.

5. Vendor Selection
Vendor selection is one of the
important step in procurement process.
With the help of obtained quotation from
sources and by comparing them, Vendors
are slected.

6. Request for Quotation
Requesting potential vendors to
submit a quotation for material or services.
Quotation contains the vendor's terms and
conditions and consitutes the basis for vendor
selection

7. Purchase requisition
A purchase requisition is an internal request to
purchasing. You ask the buyer to provide a certain quantity of a
material or service on certain date. A purchase requisition can be
created automatically by Material Requirement Planning (MRP) or
Manually created. PR converts to RFQ, PO or outline agreement.
Purchase requisition forms include the following information
 Material quantity, Description of goods & services and total value.
 Department Account number
 Signature by an authorized department.
 Delivery instructions.
 Attach quote from the Suggested Vendor.

8. Purchase Order
Purchase order is a formal request to a vendor to supply
certain materials or service under the certain conditions. A purchase
order can be created with reference, or without reference to a
purchase requisition, a request for quotation, or another purchase
order.
POs usually specify terms of payment, Incoterms, delivery
date, specifications, material quantity, price and reference or part
numbers.
Types of Purchase orders in Procurement process:
 Standard PO
 Contract PO
 Blanket PO
 Planned PO

9. Standard PO
Standard Purchase Order
It is the most basic and widely used among
different types of purchase orders, it is created
when a buyer is sure about the order details
such as the item, price, delivery schedule,
payment terms etc.
Example – Unreal corp. decides to buy 50,000 x
9W led bulbs from GE for a unit price of 10 each
to be delivered within 60 days of order date. In
such case, Unreal corp. will raise a standard PO
and send it to GE for acceptance

10. Contract PO
Contract Purchase Order
It is created for a set period of time (often for a year) the item,
pricing, quantity etc. can’t be anticipated precisely. In this case, a
contract purchase order can be raised by the buyer, which upon
acceptance becomes a legal contract.
During contract period the buyer can raise a standard PO with
specifications of requirements and request for goods.
Example – Unreal Corp. analyzes and concludes that it often requires
led bulbs of different wattage around different times of the year,
however, the requirement is irregular and can’t be anticipated. In this
case Unreal corp. can raise a contract purchase order.

11. Blanket PO
Blanket Purchase Order
It is used in cases where the item is known, but quantity
and required delivery schedules are unknown. There can
be numerous delivery dates against a blanket PO, they
are often used in case of large quantities with
exceptional discounts.
Example – Unreal corp. decides to buy 5,00,000 x 9W led
bulbs each year but they are not sure about the delivery
schedule & quantity of each release. In such a situation
Unreal corp. will raise a blanket purchase order.

12. Planned PO
Planned Purchase Order
It is used for a planned purchase anticipated for long-
term where the delivery schedule is not known in
advance. The dates of delivery can only be anticipated
therefore only tentative dates are provided to the seller.
Item, pricing and quantity are however known in
advance.
Example – Unreal Corp. has evaluated that it will have a
long-term need for the next 5 years to buy 25,000 x 11W
led bulbs each year. Instead of raising a standard PO
each time Unreal Corp. can create a planned purchase
order

13. Goods Receipt
Goods Receipts is created to reflect the
Goods Receipts for the specified material ordered from a
vendor using Purchase Order process. After receiving
the goods the company can record the following
information, this information can be used for accounting,
stock check and rotation, return any goods if there is
problem
 What goods were delivered,
 Which vendor delivered the goods.
 Who, how, when goods were delivered and received the goods.

14. Goods Receipt Invocie
Goods Receipt Invocie (GRIN)
process is one of the most important process in
procurement process cycle. It is matching the
goods are not damaged and fit for use, verifying
the price, quantity, payment terms. Goods
movement are entered in to the system with
reference of purchase order and goods receipt
material documents are posted, automatically
appropriate general ledger are posted and stock
accounts are updated.

15. Invoice Verification
After GRIN process, next process of procurement to pay is invoice
verification. It plays an important role in procurement process and
material management module which performs the following tasks
 A vendor invoice can be created with reference to a Purchase Order, a
Goods receipt, a Delivery Note.
 Invoice is verified in terms of prices, Quantity,
 Necessary approvals by project managers
After verifying all the data, the invoice is posted and the data is
saved in the system. The system updates the invoice data in
Materials Management and Financial Accounting.

16. Payment to Vendors
The last step in procurement
process cycle is payment to vendors it is
also known procure to pay process.
Vendors are get paid asper Payment
terms. In this fast technology world,
Companies can pay through many
methods to vendors. For example -
through net banking, Cheque payment etc.

17. Thank You