What is Intake-to-Pay (I2P)? Definition, benefits, & process
Learn how I2P covers procurement from request to purchase and payment.
If you’re grappling with a disjointed procurement process, you’re not alone. Many organizations struggle with the same issues—cumbersome approval processes, lack of visibility into requests, and supplier bloat, to name a few. But there’s a solution that’s gaining traction: Intake-to-Pay (I2P).
I2P is a comprehensive approach to procurement, designed to cover the entire journey from initial need identification, all the way through the final payment to a supplier. It emphasizes user experience and early visibility into spend, providing a holistic view of the procurement process.
In this article, we’ll take a look at the differences between Intake-to-Pay and Procure-to-Pay, the benefits of I2P, why a company should switch from P2P to I2P, and the kinds of things you should consider when looking for I2P software.
Intake-to-Pay vs. Procure-to-Pay: What’s the Difference?
You might be familiar with the traditional Procure-to-Pay (P2P) approach, which primarily focuses on the transactional aspects of the procurement process.
P2P starts with the creation of a purchase order (PO) after a need has been identified and approved, emphasizing compliance and efficiency within the established purchasing framework.
In contrast, Intake-to-Pay (I2P) encompasses the entire procurement journey, from the initial need identification to the request and approval stages, and ending with payment to the vendor or supplier. It focuses on user experience and early visibility into spending, providing a more comprehensive view of the procurement process.
Why Organizations Are Choosing Intake-to-Pay
Increasingly, organizations are taking stock of their P2P procurement operations and adopting I2P. This shift is driven by the desire to overcome the challenges associated with traditional P2P systems, and to reap the numerous benefits I2P offers.
Let’s take a look at the specific challenges of P2P, and how I2P addresses these issues, leading to improved efficiency, transparency, and cost savings.
The Challenges of Procure-to-Pay
- Lack of transparency: P2P systems often focus on the transactional aspects of purchasing after the need has been identified, leaving pre-PO stages shrouded in obscurity. This can lead to budget overruns and difficulty tracking spending across departments.
- Manual processes and data entry: Reliance on manual tasks for request routing, approvals, and data entry introduces errors and inefficiencies, impacting processing times and accuracy.
- Cumbersome approval processes: Complex multi-level approval chains can cause delays and frustration for requesters and procurement teams.
- Disconnect between departments: Siloed systems and lack of communication between departments can lead to duplicated efforts, missed opportunities, and a fragmented procurement experience.
The Benefits of Intake-to-Pay
I2P addresses these challenges and offers several benefits:
- Improves ROI of current processes: In his Margin Makers newsletter, Zip Head of Research Nick Hienzmann noted that optimized intake can increase spend under management by 80% in starter use cases, or push the common ceiling of 60-70% spend under management up to 90%+ spend under management. Not bad, right?
- Makes procurement an ‘influencer’: We’re not talking about social media influencers here, but I2P allows procurement to get involved earlier in the purchase process, helping to ‘influence’ spend, routing orders to current under-contract suppliers, for example.
Increased visibility and control can ‘influence’ employees to comply with purchase requirements for better pricing and outcomes. Maybe after that, you can work on your social media following. - Reduces waste: Identifies vendor overlap and eliminates unnecessary spending (saves 6% on unmanaged spend), routes one-time and recurring purchases to virtual cards for virtual card rebates (1-2% cash back) and reduced AP processing costs, and reduces manual effort in tracking requests, managing data, and vendor information (saves 45-65% of hours in the first year).
Key Features to Look for in Intake-to-Pay Software
When considering an Intake-to-Pay (I2P) solution, there are several key features that can significantly enhance your procurement process. These features not only streamline operations but also improve efficiency and provide greater visibility into spending. Let’s take a closer look at these features, many of which are integral parts of Zip’s I2P solution.
Unified Request Portal
This is the heart of the I2P system. A unified request portal serves as the single point of entry for all purchase requests, eliminating the need for manual routing and reducing confusion. It streamlines the intake process for all employees, and ensures that all requests are captured accurately and transparently.
Adaptable Request Forms
The ability to accommodate various purchase types is crucial in an I2P system. Adaptable request forms with customizable fields and workflows allow for flexibility in handling different types of purchases, whether they’re for goods, services, or projects. This feature ensures that the system can cater to the unique needs of each department within an organization.
Automated Need Validation
Before a request proceeds, it’s essential to ensure budget compliance, supplier availability, and adherence to guidelines. An automated need validation feature does this by checking each request against predefined criteria, as specified in your platform. This feature helps prevent budget overruns and ensures that purchases align with company policies and supplier agreements.
Configurable Approval Chains
Depending on the purchase amount, category, or risk level, different approval chains may be necessary. An I2P system allows for the configuration of multi-level approvals, ensuring that the right people are involved in the approval process. This feature helps maintain control over spending and reduces the risk of unauthorized purchases.
Automated Routing and Notifications
To keep the procurement process moving smoothly, an I2P system should automatically route requests through the approval process and send instant notifications to the relevant stakeholders. This ensures that everyone stays informed about the status of requests, reducing delays and improving efficiency.
And when you bring generative AI into the workflow, there’s virtually no limit to the amount of automation and insights available to empower you to make better decisions.
Automatic Purchase Order Creation
Once a request is approved, the system should automatically generate a purchase order. This feature eliminates the need for manual PO creation, reducing the risk of errors and speeding up the procurement process.
Pre-populated Purchase Orders
To further streamline the procurement process, the system should automatically fill in necessary information on the PO. This feature saves time, reduces errors, and ensures that all relevant details are included in the PO.
Zip’s Approach to Intake-to-Pay
Zip’s Intake-to-Pay solution stands out in the procurement landscape, meeting all the requirements of a next generation intake platform, offering access into the future of Intake.
It features a single-front-door intake portal, automated approval workflows, streamlined vendor management, automatic PO creation and AP automation, along with AI optimizations and integrations that ensure seamless compatibility with your entire tech stack.
By addressing the challenges of traditional Procure-to-Pay systems and harnessing the benefits of Intake-to-Pay, Zip provides a comprehensive, efficient, and user-friendly procurement solution. If you’re considering adopting an Intake-to-Pay system, Zip’s solution could be the game-changer your organization needs.
Don’t just take our word for it—request a demo to see how Zip can revolutionize your procurement process.
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