The payment request is the final link in the process “From Request to Payment”.

The payment process is very closely related to purchases, as far as timely payment can maintain good relations with suppliers and it even helps to make the working conditions better. Overdue payments, in contrast, negatively affect both the relations with suppliers and further deliveries.

In addition, payment for the provided goods / services is an obligation that a buyer undertakes.

For example, contracts with suppliers often have the following obligations:

  • a payment occurs within 30 (or another number) days after delivery
  • a supplier undertakes to provide the necessary documents in the both  original and electronic versions
  • The prices in the documents must comply with the contract / specification

If this process is separated from the purchase and left under control only of the accounting department, then there is a risk that all the terms of the contract will not be fulfilled and a company will not even know about its losses (prepayment without delivery, inflated prices in documents, electronic documents are not provided and employees spend a lot of time on manual input of information) or about the fact that not all the obligations under the contract are fulfilled.

There is also a number of reasons why it is not necessary to separate purchase, delivery and payment processes, which directly depend on the purchasing department:

  • the delivery of goods must be conducted to the full, correspond to an order and has no defects / re-sortings
  • a purchase manager is often responsible for paying suppliers and must know when payment is made
  • payment for the delivered goods can be one of the leverages on a supplier if the next delivery is not carried out correctly or a supplier refuses to supply the goods at all
  • also a purchase manager is sometimes entrusted the responsibility to control the documents from the suppliers and in that case, the delivery can not be paid for until a supplier transfers all the documents.

Therefore, the process of working with purchases often occurs in this way:

1. A purchase coordinator collects approved requests and creates an order.

2. An order is sent to the supplier.

3. A supplier delivers the goods to the warehouse and the person responsible for receiving the goods in the warehouse notes that all goods are delivered (or not all)

4. Documents that a supplier sends, go to the purchase manager

5. A purchase manager has all the data: an order that is carried out under the contract, approval from the director or an approved budget, confirmation on the delivery of goods

6. After all of the above rules are met, a purchase manager can create a payment request and send it to a responsible person (often an accountant or a financial director)

7. A payment request already contains all the information (an order, approval or budget, contract, confirmation of delivery) and can be paid on time

8. Once the payment has been made, the manager can control it

In order for the work to be performed without excel, google doc, paper, you need to select the software with the help of which you can configure the automated interaction of employees.

Typically, this software contains the following functions:

  • creating requests / orders
  • creating an approval chain
  • an automatic notification about the necissity of approval
  • linking an order with a contract and supplier’s prices
  • receipt of goods
  • creating payment requests using a 3 factor correlation
  • various payment options for suppliers – prepayment / postpaypayment
  • payment on demand
  • budget constraints
  • reporting

3-factor correlation

As previously stated, in order to be sure that payment is necessary to be conducted, it is necessary to have all the documents: an approved order, which is tied to the contract, a receipt of goods and an invoice from the supplier.

The main idea of the 3-factor correlation is to reduce the discrepancies in documents to a minimum level, i.е. to make so, that what has been ordered,  was both delivered and paid.

In fact, this can be done only if a payment request indicates the supplier’s document number, there is a reference to an order according to which this request is made, and only those goods that in fact have already been brought by the supplier can be added to a request.


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