The Purchasing and Payment Process Explained

What is the first step in the purchasing and payment process?

A. The purchaser receives an invoice for the goods shipped by the supplier.

B. The purchaser receives the inventory and prepares a receiving report.

C. The purchaser sends a check to the supplier.

D. The purchaser sends a purchase order to the supplier.

Answer:

The purchaser sends a check to the supplier is the first step in the purchasing and payment process.

The purchase-to-pay system starts with requisitioning and ends with payment.

• The process of formally requesting a service, item, or product with a purchase request form is known as requisitioning. When goods or services are received, they are procured. When payment is received, the system is terminated.
• The process of integrating purchasing and accounts payable systems in order to increase efficiencies is known as procure-to-pay. It is part of the larger procurement management process and consists of four major stages: selecting goods and services, enforcing compliance and order, receiving and reconciling, invoicing and payment.
• So the distinction between procure to pay and order to cash is straightforward: one is for sales orders and the other is for procurement.