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The expression “intake to pay” has become increasingly common in the procurement world in recent years. However, its meaning and how it differs from the traditional procure-to-pay cycle remain unclear for many.

The term “intake” describes inbound demand management, which includes the procedures for gathering, verifying, and processing requests from internal stakeholders into actual procure-to-pay transactions. The term “intake-to-pay” highlights the significance of the early intake stage in influencing the effectiveness and cost-savings of downstream procurement.

However, confusion arises when intake to pay and procure to pay are used synonymously. This blog seeks to highlight the strategic importance of strong intake management in particular and to clearly differentiate these two important procurement procedures.

Procurement leaders can optimize their intake processes to strengthen alignment between internal needs and procurement delivery for maximized value by fully understanding the difference.

What is Intake to Pay?

Intake-to-pay refers to the focuses primarily on the early stages of the procurement process, specifically the inbound demand management stage, rather than covering the full source-to-pay cycle. Key steps in an intake-to-pay flow are:

Need Intake — Stakeholders across business units submit procurement requests via channels like web forms, virtual shopping catalogs, punchouts to ERPs, etc.
Request Enrichment — Submitted requests are enriched with necessary details on specifications, business justification, expected usage, etc.
Request Validation — Requests get routed to approvers as per policy thresholds for validation. Budget availability gets verified.
Procurement Execution — Validated requests get converted to POs and sourced from contracted suppliers in a compliant manner. Downstream procure-to-pay processes follow.
Lifecycle Tracking — Full visibility into request status from initiation to fulfillment or closure. Analytics provide insights into lead times, cycle times, etc.

In intake-to-procure, the execution of compliant sourcing is prioritized together with the inbound demand management stage. Benefits include optimizing contract coverage, controlling spending, and matching to real needs. The absence of guardrails for requests and their fungibility across budgets present difficulties, though.

What is Procure to Pay?

Procure-to-pay (P2P) refers to the procurement process that covers activities involved from the initiation of a purchase requirement to making payment to the supplier. Key steps include:

Purchase Requisition — Internal users create and submit purchase requisitions for needed goods/services.
Purchase Order — Requisitions are converted into approved purchase orders after budget checks.
Order Execution — Suppliers deliver the requested goods or services as per the PO terms.
Invoice Processing — Invoices received from the supplier are validated against POs and receipts.
Invoice Approval — Validated invoices are routed for payment approval based on thresholds.
Payment — Final approved invoices are paid to suppliers through the organization’s payment system.

Explore: Zycus’ Procure to Pay Software

The goal of the procure-to-pay cycle is to connect and automate the procurement processes to improve compliance, efficiency, and working capital. However, there are obstacles, like malfunctioning systems and the absence of upstream intake controls.

Also read: Procure To Pay Automation – Best Practices and Benefits

In a nutshell, procure-to-pay focuses on the transactional aspects of requests that are integrated into the procurement procedure. The successful execution of compliant, value-focused procurement is mostly contingent upon intake management.

Intake to Pay and Procure to Pay – Key Differences

While intake-to-pay and procure-to-pay deal with interlinked aspects of the buying workflow, there are some key differences between the two approaches:

Scope	Focuses primarily on the early stages of procurement, managing and shaping inbound demand	Focuses on the transactional procurement process once requests are introduced
Emphasis	Gives more importance to shaping, managing, and tracking inbound demand	Oriented around automating and connecting downstream procurement execution
Request Management	Applies strong request intake controls including enrichment, approvals, guided buying, etc.	Often involves stages of request management and validation, though the focus is more on the transactional and execution aspects of procurement
Analytics	Provides visibility into request trends, adoption metrics, cycle times, etc.	Limited insights into upstream demand patterns
Automation	Heavier focus on intake automation including self-service, no-touch approvals etc.	Automates downstream procurement workflows like PO creation, invoice processing etc.
Risk Management	Controls risks like budget overruns and maverick buying by embedding guardrails early	Involves both proactive and reactive risk management strategies, including compliance checks and validation processes
Stakeholder Alignment	Tight alignment between internal needs and procurement delivery	Misalignments more likely due to inadequate intake control

When is Intake-to-Pay Preferable Over Procure-to-Pay?

Organizations that heavily decentralize their procurement processes and lack intake guardrails can benefit from intake-to-pay by improving demand shaping and compliance control.

This is generally true, but it’s important to add that Intake to procure is also beneficial for organizations aiming to strengthen their demand planning and control, not just for those with decentralized processes. It’s about improving the quality and compliance of procurement requests before they enter the Procure-to-Pay cycle.

It is the best solution for customers looking to purchase self-sufficiency to increase adoption. Planning categories and maximizing contract coverage are made easier with an intake focus.

Transitioning to modern execution while using the historical procure-to-pay nomenclature helps reduce change management for organizations with established centralized intake programs.

Adopting any new system or process, whether it’s labeled as Adopting either an Intake-to-Pay or Procure-to-Pay system, can still involve significant change management efforts.

Also, procure-to-pay can be a better option for capital expenditures (CAPEX) with limited budget fungibility. The best features of procure-to-pay and intake management are combined in an integrated solution.

Bridging the Gap with Intake Management

Many organizations continue relying on decentralized, manual approaches for handling incoming procurement requests. However, spreadsheets, emails, and paper-based forms pose multiple challenges including:

Lack of visibility into who is requesting what at an enterprise level
Difficulty ensuring requests meet budget and policy compliance
Increased maverick spend due to the inability to guide requestors
Delays and errors from manual request routing and data entry
Reactive procurement without insights into upcoming demand

This results in bloated processes, compliance issues, and an inability to leverage spend. Intake management aims to transform request management by providing:

Consolidated intake channels like self-service portals
Guided buying catalogs for compliant requesting
Configurable workflows for streamlined routing
Analytics for real-time visibility and continuous optimization
Integration with downstream procurement systems

Also, read our blog on: Unlocking Success: Intake Management Best Practices And Key Strategies

Transforming Intake with Zycus Merlin Intake

Zycus offers a robust Intake Management Solution designed to streamline and enhance the procurement request process. With cutting-edge AI capabilities, Merlin Intake ensures efficiency and compliance at every step.

Unified Intake Channels — Leverage AI-powered intake through self-service portals, emails, and ERP integrations, ensuring consistent and streamlined request submissions.
Customizable Workflows — Tailor approval chains, automated routing, and thresholds to align with your unique business processes.
Intelligent Tracking and Insights — Real-time updates, comprehensive audit trails, and advanced analytics identify bottlenecks, enabling proactive process improvements.
Seamless Integration Across Systems — Inbuilt integration with Merlin’s Source-to-Pay suite, including sourcing, contracts, and procurement, drives operational efficiency and alignment.

Intake-to-Pay vs. Procure-to-Pay: Evaluating the Optimal Approach for Business Success

When considering the most effective approach for business operations, it becomes crucial to evaluate the pros and cons of both intake-to-pay and procure-to-pay methodologies. Intake-to-pay refers to the end-to-end process that encompasses the entire lifecycle from requisitioning and sourcing to payment settlement. On the other hand, procure-to-pay focuses specifically on the procurement aspects of the process, involving activities such as vendor selection, purchase order creation, and invoice processing.

While both approaches aim to streamline business transactions and enhance efficiency, it is important to carefully assess their

Real-World Impact: Accelerating Procurement Excellence

With Merlin Intake, organizations can reduce manual inefficiencies, improve request accuracy, enhance user satisfaction, and align strategic intake with procurement goals. By enabling data-driven decisions and automating low-value tasks, Merlin Intake delivers significant ROI, empowering procurement teams to focus on strategic initiatives.

Download Whitepaper: Transforming Procurement Efficiency with Built-In Intake Management

Explore the transformative potential of Merlin Intake. Request a demo today to see how our solution can optimize your procurement processes and drive maximum value across your procurement lifecycle.

Visit: Intake Management Resource Center to know more about Zycus Merlin Intake

Conclusion

Optimizing procurement processes is crucial for enhancing operational efficiency and achieving strategic goals. The innovative solutions provided by Zycus can lead to transformative impacts in procurement efficiency, from intake management to procure-to-pay processes. By embracing technologies like Zycus Merlin Intake or the broader Source-to-Pay suite, organizations can enjoy reduced cycle times, improved compliance, and enhanced decision-making capabilities. Ultimately, integrating such advanced procurement tools empowers businesses to streamline operations, increase transparency, and maximize value across their procurement lifecycle.

FAQ’s

Q1. What is the main goal of the Intake to Pay process?

The main goal of the Intake to Pay process is to streamline procurement and payment workflows to drive savings and operational efficiency.

Q2. How does Procure to Pay enhance organizational efficiency?

Procure to Pay enhances organizational efficiency by integrating purchasing and payment processes, reducing manual errors, and optimizing cash flow management.

Q3. What are the key benefits of implementing an automated Intake to Pay system?

Key benefits include improved transparency, faster processing times, cost savings, and enhanced compliance with procurement policies.

Q4. How can digital transformation impact the Procure to Pay process?

Digital transformation can significantly impact the Procure to Pay process by leveraging technology to automate tasks, improve data analytics, and facilitate better supplier management.

Q5. What role do analytics play in optimizing the Intake to Pay and Procure to Pay processes?

Analytics play a crucial role by providing insights into spending patterns, identifying cost-saving opportunities, and allowing for data-driven decision-making.

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Pranav Ramkumar

Pranav R is a Content Marketer with expertise and experience in creating & curating content for audiences of all ages. Graduating with an MBA from IITM in 2021, he explored his PM inclinations for a year, before joining Zycus. He’s been writing about procurement & paraphernalia for 1.5+ years and is passionate about bringing new perspectives, pointers & puns to what he writes. Outside work, he’s an Arsenal fan, and is a quiz & word games enthusiast.