In today’s competitive business landscape, Indian enterprises are under growing pressure to streamline operations, ensure compliance, and strengthen supplier relationships. The procure-to-pay (P2P) process—covering everything from requisitioning to vendor payment—sits at the core of operational efficiency. However, Indian businesses face unique hurdles due to the diverse nature of their operations. With many organizations operating in multi-entity, multi-plant environments and dealing with a combination of direct materials and service procurement, implementing a robust P2P system is far from straightforward. Add to this the complexity of India’s regulatory landscape—including GST, e-invoicing, e-way bills, TDS, TCS, and Input Tax Credit (ITC) controls—and it becomes clear why Indian enterprises need thoughtful strategies to achieve P2P excellence.

 

This blog highlights the most common P2P challenges Indian businesses encounter and explores proven approaches to overcome them.

  1. Low Purchase Order (PO) Coverage

One of the most persistent issues in Indian enterprises is low PO coverage. Many purchases, especially in indirect and services categories, bypass the formal PO process. This leads to non-standardized buying, poor spend visibility, and increased chances of exceptions during invoice processing.

How to overcome it:

  • Guided buying tools: Modern P2P platforms can guide employees toward compliant purchasing channels, ensuring higher PO adoption.
  • Policy enforcement: Enterprises should define clear procurement policies mandating PO usage for all categories.
  • Analytics for exceptions: Dashboards can track non-PO invoices and help procurement leaders address root causes of non-compliance.
  1. Services Procurement Without Standardized Entry Sheets

Services procurement, unlike goods procurement, requires validation of intangible deliverables. Without standardized service entry sheets, organizations face disputes over service completion, delayed approvals, and difficulty linking invoices to actual services rendered.

How to overcome it:

  • Standard templates: Introduce digital service entry sheets with predefined parameters such as scope, milestones, and acceptance criteria.
  • Automation: Automate workflows to ensure that services are validated and approved before invoice submission.
  • Audit readiness: Maintain a centralized repository of service confirmations for transparency and compliance.
  1. Vendor Master Data Gaps

Incomplete or inaccurate vendor master data often leads to compliance mismatches, payment delays, and errors in GST validation. Issues such as missing GSTINs, PAN numbers, or incorrect bank details can disrupt operations significantly.

How to overcome it:

  • Vendor onboarding portals: Enable suppliers to directly submit and update their details with validation checks.
  • Periodic cleansing: Conduct regular audits to eliminate duplicates and update compliance-critical fields.
  • Integration with GST networks: Ensure that vendor data aligns with government systems to minimize rejections during invoice processing.
  1. Approval Delays Due to Email Workflows

Traditional email-based approval processes often lead to bottlenecks. Ambiguity in authority matrices and reliance on manual follow-ups delay procurement cycles and vendor payments.

How to overcome it:

  • SLA-driven approvals: Implement workflows with defined service level agreements for approval turnaround times.
  • Mobile accessibility: Provide managers with mobile-enabled approval options to speed up decision-making.
  • Dynamic authority matrices: Automate delegation of authority to ensure compliance and reduce approval ambiguities.
  1. Non-Compliance with GST Validations

India’s GST framework demands meticulous adherence to validation rules for e-invoicing, e-way bills, and ITC claims. Non-compliance can result in invoice rejections, delayed payments, and financial penalties.

How to overcome it:

  • GST-ready workflows: Choose P2P systems that natively integrate GST validations during invoice capture.
  • Real-time checks: Automate matching of GSTIN, HSN codes, and tax amounts with government portals.
  • Proactive compliance dashboards: Build dashboards highlighting invoices at risk due to GST non-compliance, enabling finance teams to act before deadlines.

Building Blocks of Successful P2P Implementation in India

Overcoming the above challenges requires more than just technology. A successful P2P transformation depends on aligning people, processes, and tools with Indian market realities. Here are three critical best practices:

  1. Cleansing Vendor Masters: A clean vendor master is the foundation of a healthy P2P process. Invest in one-time cleansing exercises and build governance mechanisms to maintain data integrity.
  2. Automating Exception Handling: No system is free from exceptions, but automation can significantly reduce manual intervention. From three-way matching of POs, goods receipts, and invoices to flagging unusual tax codes, automation ensures faster, error-free resolutions.
  3. Dashboards for Compliance Visibility: In an environment shaped by evolving GST rules, enterprises need real-time visibility into compliance. Dashboards that provide drill-downs into invoice statuses, vendor compliance rates, and approval delays empower organizations to make proactive decisions.

Efficiency, Compliance, and Resilience

By embracing best-in-class P2P solutions and practices, Indian enterprises can achieve three key outcomes:

  • Efficiency: Reduced cycle times from requisition to payment, improved PO coverage, and fewer manual interventions.
  • Compliance: Alignment with GST regulations, audit-ready documentation, and minimized risks of penalties.
  • Resilience: Stronger supplier relationships, improved cash flow predictability, and greater agility in managing complex procurement environments.

For Indian enterprises, the path to P2P excellence is paved with challenges, from fragmented processes and vendor data gaps to the ever-changing compliance landscape. However, with the right mix of guided buying tools, automated workflows, GST-ready validations, and strong data governance, organizations can transform these challenges into opportunities. By focusing on vendor master cleansing, exception automation, and compliance dashboards, Indian businesses can unlock a P2P process that is not only efficient but also future-ready.

A well-implemented P2P system is more than just a back-office function—it is a strategic enabler of efficiency, compliance, and growth in India’s dynamic business ecosystem.

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Indian enterprises often struggle with low PO coverage, non-standardized service entry sheets, vendor master data gaps, delayed email approvals, and strict GST validation requirements. These challenges slow procurement cycles and increase compliance risks, especially in multi-entity, multi-plant environments common across India.

PO coverage stays low because employees bypass formal buying channels, especially for services and indirect procurement. Lack of guided buying, unclear policies, and limited visibility into off-PO spend contribute to inconsistent procurement practices and higher exceptions during invoice processing.

Companies can improve PO compliance by deploying guided buying tools, enforcing procurement policies, and using analytics to track non-PO invoices. These measures standardize purchases, reduce maverick spending, and ensure invoices match approved POs before payment processing.

Service procurement is difficult because deliverables are intangible and often lack clear validation criteria. Without standardized service entry sheets, organizations face delayed approvals, disputes on service completion, and challenges linking invoices to actual work done.

Incomplete vendor data—such as missing GSTIN, PAN, or bank details—causes payment delays, compliance failures, and GST mismatches. Poor data quality leads to invoice rejections during GST validation and increases the manual effort required for vendor verification.

Businesses can improve vendor master accuracy by using digital onboarding portals, running periodic data cleansing exercises, and syncing vendor details with GST networks. These steps eliminate duplicates, ensure compliance, and speed up invoice processing.

Email approvals lack defined SLAs, authority clarity, and auditability, causing bottlenecks. Manual follow-ups, missing documentation, and delayed responses increase cycle times, affecting vendor payments and overall procurement efficiency.

Enterprises can ensure GST compliance by using P2P systems with built-in GST validations, real-time checks for GSTIN and tax amounts, and dashboards that flag invoices at risk. Automated validation reduces rejections, improves ITC accuracy, and ensures audit readiness.

Key building blocks include cleansing vendor master data, automating exception handling, enabling GST-ready workflows, and deploying dashboards for compliance visibility. Aligning people, processes, and technology ensures faster procurement cycles and stronger audit compliance.

P2P automation speeds up approvals, reduces manual intervention, enhances PO coverage, and ensures GST compliance. This leads to predictable cash flow, fewer errors, stronger supplier relationships, and greater agility in managing complex procurement environments.

Author – Prachi Gurjar

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