9 Key Controls to Mitigate Purchase-to-Pay Compliance Concerns

  • by Anurag Barua, Independent SAP Advisor
  • November 5, 2010
Step through nine common purchase-to-pay scenarios and their proper mitigations on the way to compliance. These tips include configuration and processes you can apply in your standard SAP ERP systems.
Key Concept
Purchase-to-pay or procure-to-pay (commonly referred to as P2P) is one of the most common and critical business processes for any company that buys a good or service. P2P consists of all the subprocesses and activities from the time a determination is made to buy a good or service through its payment. It includes activities and processes such as a request for quotation, purchase requisition, vendor selection, purchase orders, goods receipt, invoice receipts, and payments.

The purchase-to-pay (P2P) process straddles key modules in the SAP ERP system, including materials management (MM) and accounts payable (AP). Given the sprawling nature of the process, as well as its importance and impact on the bottom line, it is important that companies implement strong controls that mitigate the risk of mistakes or fraud.

I’ll take you through nine scenarios that I’ve seen companies face in their P2P processes, and how to mitigate them in SAP ERP systems. These scenarios and their mitigation are targeted to business analysts, configuration specialists, and security or internal audit personnel, all of whom are collectively responsible for maintaining the integrity of the P2P process in an enterprise. All scenarios and screenprints are from an SAP ERP Central Component (SAP ECC) 6.0 system, but the concepts and controls apply to earlier versions as well.

Scenario 1: If accounts payable (AP) entries are not properly posted in the general ledger, it is possible that your AP is understated, thereby causing potential financial misstatements. It is important to note that AP needs to be accurately synchronized with your general ledger.

Anurag Barua

Anurag Barua is an independent SAP advisor. He has 23 years of experience in conceiving, designing, managing, and implementing complex software solutions, including more than 17 years of experience with SAP applications. He has been associated with several SAP implementations in various capacities. His core SAP competencies include FI and Controlling FI/CO, logistics, SAP BW, SAP BusinessObjects, Enterprise Performance Management, SAP Solution Manager, Governance, Risk, and Compliance (GRC), and project management. He is a frequent speaker at SAPinsider conferences and contributes to several publications. He holds a BS in computer science and an MBA in finance. He is a PMI-certified PMP, a Certified Scrum Master (CSM), and is ITIL V3F certified.

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