Procure to pay (P2P) is the end-to-end cycle that starts when someone in a company needs to buy something and ends when the supplier is paid and the purchase is in the books. When each team keeps its own records, a bill waits for a receipt nobody posted, 180 days pass, and the input tax credit reverses with interest.
In OneFinOps, the Procurement Agent and the Payables Agent work on one order, so the receipt is already there when the bill arrives.
Key takeaways
- Each P2P step leaves a document the next step checks.
- The core control is the 3-way match of PO, GRN and invoice.
- In India, GST credit, TDS and MSME payment limits sit inside the cycle.
What are the steps in the procure to pay process?
- Identify the need and raise a purchase requisition, tied to a budget line or cost centre.
- Approve it within value limits, with budget checked here.
- Issue a purchase order to an approved supplier, with price, GST details and payment terms.
- Receive the goods and record a goods receipt note (GRN) for the accepted quantity, or a service sign-off.
- Receive and match the invoice: 3-way match of PO, GRN and invoice, including tax.
- Book and pay it, with input GST recorded, TDS deducted where it applies, and payment on the due date.
Steps 5 and 6 are the accounts payable process.
P2P example with rupee figures
A Chennai manufacturer orders 500 cartons at ₹240 from a Tamil Nadu supplier, ₹1,20,000 plus CGST and SGST (18% assumed). Stores accepts 480, but the supplier bills all 500 for ₹1,41,600.
| Line | PO | GRN | Invoice | Payable |
|---|---|---|---|---|
| Quantity | 500 | 480 | 500 | 480 |
| Taxable value | ₹1,20,000 | ₹1,15,200 | ₹1,20,000 | ₹1,15,200 |
| Total with GST | ₹1,41,600 | n/a | ₹1,41,600 | ₹1,35,936 |
AP pays ₹1,35,936 and asks for a credit note of ₹5,664. The PO itself creates no entry; the GRN posts Inventory Dr, GRN clearing Cr, ₹1,15,200.
What India-specific rules sit inside the P2P cycle?
- GST credit. Under section 16(2) of the CGST Act, if you do not pay the supplier value plus tax within 180 days of the invoice date, the credit is added back with interest.
- TDS on purchase of goods. Section 393(1), Table serial 8(ii) of the Income-tax Act, 2025 (earlier 194Q): 0.1% on purchases above ₹50 lakh, for buyers with turnover above ₹10 crore. See section 194Q.
- MSME payment limits. Section 15 of the MSMED Act caps payment to micro and small suppliers at 45 days from acceptance. Late payment carries compound interest at three times the RBI bank rate; the MSME interest calculator works it out.
How OneFinOps runs procure to pay
The Procurement Agent drafts the order from the vendor’s quotation, checks budget and vendor qualification, and routes it for approval, then records the commitment and the goods receipt. The Payables Agent matches each invoice line to that order and receipt, holds duplicates and adds the bill to the next payment proposal.
People hold the decisions. An order above the approval limit goes to the budget holder, and the payment run is released by the person who holds the mandate.
With separate procurement and AP tools, someone reconciles the order and the bill by hand. In OneFinOps it is one record.
See how the Procurement Agent works
