From the course: Supply Chain and Operations Careers: Certification Tips and Tricks

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Explanation of procure to pay

Explanation of procure to pay

From the course: Supply Chain and Operations Careers: Certification Tips and Tricks

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Explanation of procure to pay

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Have you ever wondered why it's so hard to buy anything for yourself when you work in a big company? Or why it takes big companies so long to pay their bills? Well, the reason is that these companies need to have a process in place to control how their money gets spent. The bigger the company, the more money they spend, and the more important it is to have well-defined steps, starting with sourcing or procuring an item and ending with paying the bill. Supply chain folks have a name for all of the steps in that process. We call it the procure-to-pay or the source-to-pay cycle. So let's walk through the seven steps in a typical procure-to-pay process. First, in order to buy anything, you generally need to start with a requisition order or a req for short. That req means the company is giving you permission to make a purchase. Now, you need to decide where to buy it. In other words, you need to select a vendor. The company may have pre-approved vendors who sell the thing you need. They…

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