A Practical Guide to Auditing and Improving Your P2P Process
An efficient Procure-to-Pay (P2P) process is critical for controlling spend, maintaining compliance, and protecting financial integrity. From raising a purchase request to paying a supplier, every step in the P2P cycle needs to be accurate, controlled, and transparent.
This Procure-to-Pay audit checklist is designed to help finance teams, internal auditors, and procurement leaders assess how well their P2P process is working. It highlights common risks, control gaps, and inefficiencies, while providing a structured way to review procurement policies, supplier management, invoice processing, and payment controls.
Regular P2P audits are essential for reducing fraud risk, improving data accuracy, strengthening internal controls, and identifying opportunities to streamline operations. Whether you are preparing for an internal audit, external audit, or looking to improve performance, this guide gives you a clear place to start.
What Is a Procure-to-Pay (P2P) Audit?
A Procure-to-Pay audit is a detailed review of the full procurement lifecycle, from the initial requisition of goods or services through to supplier payment. The purpose of a P2P audit is to evaluate:
- How efficiently procurement activities are carried out
- Whether transactions follow internal policies and approval rules
- If financial data is accurate, complete, and properly authorised
- Where risks such as fraud, errors, or non-compliance may exist
A strong P2P process internal audit ensures that purchasing decisions are controlled, supplier payments are valid, and financial reporting can be trusted.
The P2P Audit Process Explained
A structured Procure-to-Pay audit typically follows these key stages.
1. Audit Planning and Scope Definition
Start by clearly defining what the audit will cover and why.
- Set audit objectives and success criteria
- Define the scope of the P2P process being reviewed
- Assign audit roles and responsibilities
- Review procurement policies, approval limits, and regulatory requirements
- Build an audit plan with timelines and milestones
Clear planning ensures the audit stays focused on the areas that matter most.
2. P2P Risk Assessment
Risk assessment helps prioritise effort and identify high-impact areas.
- Identify risks such as duplicate payments, unauthorised spend, or weak supplier controls
- Assess transaction volumes, values, and complexity
- Consider regulatory exposure and compliance requirements
- Focus on areas with manual intervention or limited visibility
This step ensures audit resources are used where risk is highest.
3. Data Collection and Evidence Gathering
Accurate data is essential for a meaningful P2P audit.
- Collect purchase orders, contracts, invoices, goods receipts, and payment records
- Extract transaction data from ERP and procurement systems
- Review supplier master data and onboarding documentation
- Interview procurement, finance, and AP teams to understand workflows
Good data access allows auditors to test controls effectively.
4. Transaction Testing and Analysis
Testing confirms whether controls work in practice.
- Check that purchases are approved according to policy
- Verify three-way matching between PO, invoice, and receipt
- Review invoice accuracy, tax treatment, and coding
- Analyse transactions for anomalies, trends, and duplicate payments
This step often reveals inefficiencies or control gaps that are not visible on paper.
5. Internal Control Evaluation
A key part of any Procure-to-Pay audit is reviewing internal controls.
- Assess segregation of duties across procurement and payments
- Review approval hierarchies and system permissions
- Check documentation standards and audit trail completeness
- Evaluate management oversight and control ownership
Weak controls increase the risk of error, fraud, and audit findings.
6. Audit Findings and Recommendations
Clear findings turn audit work into action.
- Document control weaknesses, compliance failures, and inefficiencies
- Assess financial, operational, and reputational impact
- Prioritise issues based on risk and materiality
- Provide practical, achievable recommendations
Strong recommendations focus on long-term improvement, not short-term fixes.
7. Audit Reporting and Communication
Effective reporting ensures findings are understood and acted upon.
- Summarise audit scope, approach, and key results
- Present findings clearly to finance leaders and stakeholders
- Capture management responses and agreed actions
- Align recommendations with business objectives
Clear communication improves buy-in and accountability.
8. Follow-Up and Continuous Monitoring
A P2P audit does not end with the report.
- Track corrective actions and implementation progress
- Review whether controls are operating as intended
- Perform follow-up testing where required
- Use insights to improve future audits
This approach supports continuous improvement rather than one-off compliance.
Why a Complete Procure-to-Pay Audit Matters
A full P2P audit delivers value well beyond compliance.
Risk Reduction
Auditing each stage of the P2P process helps uncover fraud risk, payment errors, policy breaches, and supplier issues before they escalate.
Financial Accuracy
A strong audit ensures transactions are correctly authorised, recorded, and reported, protecting the accuracy of financial statements.
Operational Efficiency
P2P audits highlight bottlenecks, manual workarounds, and duplicated effort, creating opportunities to reduce cost and cycle times.
Compliance Assurance
Regular audits help organisations meet regulatory requirements such as SOX, GDPR, and industry-specific controls.
Supplier Governance
Reviewing supplier onboarding, pricing, and performance improves supplier relationships and reduces supply chain risk.
Stronger Internal Controls
Identifying control gaps allows organisations to strengthen approval workflows, segregation of duties, and audit trails.
Increased Stakeholder Confidence
Consistent P2P audits demonstrate strong governance and financial discipline, building trust with regulators, auditors, and leadership teams.
How Automation Improves Procure-to-Pay Audits
Automation plays a major role in modern P2P audits by improving visibility, accuracy, and efficiency.
Automated Data Capture and Analysis
Intelligent capture and automation tools extract invoice and transaction data directly from source systems, reducing manual handling and speeding up audits.
Continuous Transaction Monitoring
Automated monitoring flags policy breaches, unusual transactions, and control failures in real time rather than after the fact.
Rule-Based Audit Testing
Pre-defined rules identify issues such as duplicate invoices, unauthorised spend, and pricing mismatches consistently across large data sets.
Workflow Automation
Automated P2P workflows enforce approval rules and standard processes, making control testing easier and more reliable.
Exception Management
Automation handles routine exceptions, allowing audit teams to focus on risk analysis and control evaluation.
Complete Audit Trails
Digital P2P systems automatically log approvals, changes, and actions, providing clear evidence for auditors.
Reporting and Analytics
Automated reporting and analytics tools support deeper insight into spend patterns, supplier behaviour, and process performance.
Implement Stronger P2P Processes with Confidence
By following a structured Procure-to-Pay audit checklist, organisations can identify weaknesses, reduce risk, and improve control across the entire procurement lifecycle. P2P audits support better decision-making, cleaner financial data, and more efficient operations.
They also help organisations demonstrate accountability, strengthen supplier trust, and make better use of resources through improved visibility and control.
If you would like expert support with P2P audits, automation, or Procure-to-Pay optimisation, get in touch with our team to discuss your requirements.
