What is P2P cycle / AP?

Question

Accepted Answer

P2P cycle or AP refers to the end-to-end process of purchasing goods or services, receiving and verifying invoices, and making payments to vendors.

P2P stands for Procure-to-Pay, which encompasses all activities from requisitioning to payment.
Accounts Payable (AP) is the department responsible for managing and processing vendor invoices.
The P2P cycle starts with the identification of a need for goods or services and ends with the payment to the vendor.
Key steps in the P2P cycle include requisitioning, purchase order creation, goods receipt, invoice verification, and payment processing.
The AP team ensures that invoices are accurate, properly authorized, and match the goods or services received.
Efficient P2P processes help organizations control costs, manage vendor relationships, and maintain accurate financial records.

Accepted Answer

P2P cycle starts with purchase and followed by purchase order then the store keeper receive the material and pass the accounting entry with the t code migo material account Dr to gr/ir account then we receive the soft copy of invoice after checking 2 way match, 3 way match, all commercial parameters then we process the vendor invoice with the tcode miro and pass the accounting entry gr/ir account Dr to vendor account. One payable is created then payment team will release the vendor payment and pass the accounting entry vendor account Dr to bank account then reconciliation team reconcile the vendor account and report to management.

What is P2P cycle / AP?

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