Purchase to pay is the full cycle that runs from the moment someone in your kitchen decides to order stock to the moment the supplier gets paid. In a restaurant, hotel or pub that cycle repeats dozens of times a week, so small gaps in it add up fast.
Take a normal Tuesday delivery at 6am. The fish arrives 2 kg short, the driver is in a hurry, and the porter signs the delivery note anyway.
Three weeks later the full invoice turns up on a supplier statement and gets paid. Nobody fiddled anything. Nobody checked either.
A loose purchase to pay routine costs more when prices keep rising. In UKHospitality’s October 2026 member survey, 88% of operators named food and drink cost inflation as their biggest non-tax worry.
In this guide, we walk through the purchase to pay cycle in hospitality terms, with a £ example and the VAT and e-invoicing rules that will change how you pay suppliers. It is the same cycle that good e-procurement services put on one system instead of paper, texts and phone calls.
Jump to a section:
- What it means
- Why it matters
- The 7 steps
- A 70-cover restaurant example
- Three-way matching
- Credit notes
- Where it breaks down
- VAT and e-invoicing
- Manual or digital
- Checklist
- FAQs
What Is the Purchase to Pay Process?
Purchase to pay, also known as procure to pay or the P2P process, covers every step between a need and a payment. It links ordering, receiving, invoice checks, fixing errors and the payment run.
In most venues those jobs sit with different people. Chefs and bar managers buy, while a bookkeeper or the GM pays. Purchase to pay is the system that makes both sides work from the same facts.
| Term | What it means in a kitchen or bar |
|---|---|
| Purchase order (PO) | A written order listing items, quantities and agreed prices |
| Price file | The prices a supplier has agreed for your account, for a set period |
| Delivery note | The supplier’s paperwork that comes with the goods and gets signed at the door |
| Goods received note (GRN) | Your own record of what you actually accepted after checks |
| Invoice | The supplier’s bill, which should match the order and the GRN |
| Credit note | A supplier document that reduces an invoice for shorts, returns or price errors |
| Supplier statement | A monthly list of every invoice, credit and payment on your account |
Purchase to pay picks up where supplier choice ends. Once a supplier is on your approved supplier list, this is how every order with them should run.
The steps before that point, such as sourcing and tendering, belong to the wider hospitality procurement process.
Why Purchase to Pay Matters for UK Restaurants, Hotels and Pubs
Purchase to pay matters because food and drink is one of your largest costs, and you buy most of it in small, frequent orders. With nine suppliers delivering two or three times a week, a 70-cover restaurant handles around 100 invoices a month.
Each of those invoices is a chance to pay the wrong price, for the wrong quantity, or twice. One wrong line might be a fiver. Twenty a month is a real bill.
Prices are still moving, too. The NIQ and Prestige Purchasing Foodservice Price Index stood at 154.1 in August 2026, 2.7% higher than a year earlier.
So the price you agreed in spring may not be the price on today’s invoice. Without a check against your price file, supplier price increases can slip into your accounts unnoticed.
Good purchase to pay controls also protect your numbers. If the invoices are wrong, your food cost is wrong, and so is every menu decision you base on it. Clean invoice data is the first step to calculate food cost accurately.
The 7 Steps of the Purchase to Pay Cycle
The purchase to pay cycle in hospitality has seven steps. Each step has an owner, a document and a check.
| Step | Who usually does it | Document | The check |
|---|---|---|---|
| 1. Spot the need | Head chef, bar manager, head housekeeper | Stock count, par sheet | Order the gap, not a guess |
| 2. Raise the order | The same person, within an approval limit | Order or PO against the price file | Item, quantity and price agreed |
| 3. Confirm the order | Supplier, then the person who ordered | Order confirmation | Substitutions checked for price, spec and allergens |
| 4. Receive the goods | Sous chef, kitchen porter, cellar lead | Delivery note, GRN | Count, weigh, probe, then sign |
| 5. Match the invoice | Bookkeeper or GM | Invoice | Price file, order and GRN all agree |
| 6. Fix exceptions | Bookkeeper | Credit note or corrected invoice | Credit logged, chased after 7 days |
| 7. Approve and pay | GM approves, bookkeeper pays | Supplier statement, payment run | Statement reconciled before paying |
Step 1: Spot the Need
Start each order from a stock count. Compare it with your par levels, then order the gap to par, adjusted for covers booked before the next delivery.
A hotel adds banqueting sheets and room-service forecasts. A pub checks the weekend fixtures before the beer order goes in.
Step 2: Raise the Order
Food and drink on an agreed price file can run as standing orders, without a separate purchase order each time. Anything else needs a PO.
For most independents, raise a formal PO for any item not on the price file, any one-off order over £200, and all non-food spend such as small equipment, repairs and cleaning contracts.
Then set approval limits by role, so a sous chef can order up to £300 a day while the GM signs off anything bigger. Our guide to purchase order control shows how to set those limits.
Keep every order in writing. A 10pm phone call to the fish supplier leaves nothing to check the invoice against.
If a regular supplier has never agreed prices with you, fix that first. Ask for a written price file with a review date, and run a supplier cost comparison before it resets.
Step 3: Confirm the Order and Any Substitutions
Many suppliers send an order confirmation by email or through their app. If yours do not, ask at least for a note of substitutions before the van leaves.
Say the supplier swaps a 5 kg tub of crème fraîche for two 2.5 kg tubs from a different brand. The price per kilo and the allergen information may both change, so accept the swap only if both still work for your recipes.
Step 4: Receive and Check the Delivery
Goods-in is where many purchase to pay leaks start, because it happens early and in a rush. Check counts and weights against your own order, not against the supplier’s delivery note.
Probe chilled goods as they come off the van. Under the Food Safety and Hygiene (England) Regulations 2013, chilled food must be kept at 8°C or below, and many kitchens set 5°C as their own rejection point.
Note every short, damaged or rejected item on the delivery note or the driver’s handheld before you sign. Then record what you actually accepted as a goods received note, on paper or in your system.
Step 5: Match the Invoice
Matching means checking the invoice line by line against the order and the GRN. The price must match the price file, and the quantity must match what you accepted at the door.
Watch catch-weight lines such as meat and fish, where the invoice shows the real weight. A variance of about 2% on weight is fair, but the price per kilo should match exactly.
Check the VAT as well. Under HMRC’s VAT Notice 701/14 most food is zero-rated, but alcohol, soft drinks, crisps and confectionery are standard-rated at 20%, and so are cleaning products.
Step 6: Sort Out Exceptions
Any line that fails the match becomes an exception. Hold that line rather than the whole invoice, ask the supplier for a credit note or a corrected invoice, and log the date you asked.
If the credit has not arrived within 7 days, chase it in writing and copy in your account manager.
Step 7: Approve and Pay
Pay on matched invoices, never on the statement alone. Approve the matched total and pay it in each payment run, on the terms you agreed, such as 30 days from the end of the month.
Before each payment run, reconcile every supplier statement against your own list of invoices and credits. If an invoice on the statement does not match a delivery you received, query it before you pay.
Keep ordering and paying apart, even in a small team. If the head chef orders and receives, someone else should approve the payment.
Purchase to Pay Example: A 70-Cover Restaurant’s Month
This illustrative example uses the errors three-way matching is built to catch, not ESConnect client data.
A 70-cover restaurant spends £22,000 a month on food and drink, ex VAT, with nine regular suppliers. For the first time, the owner asks the bookkeeper to run a full three-way match on one month of invoices.
| Error found | Lines | Cost this month | Step that stops it |
|---|---|---|---|
| Prices above the agreed price file | 11 | £360 | Step 5: match the invoice |
| Short deliveries never credited | 7 | £210 | Steps 4 and 6 |
| Rejected goods still invoiced | 2 | £120 | Steps 4 and 6 |
| One invoice paid twice | 1 | £245 | Step 7: reconcile the statement |
| Delivery charges not in the agreement | 5 | £45 | Steps 2 and 5 |
| Total | 26 | £980 |
That is £980 in a single month, or about 4.5% of spend. If that pattern repeated every month, it would cost about £11,760 a year.
For scale, a 2.7% rise in prices would add about £594 a month to the same spend. Every line in the table traces back to a purchase to pay step the restaurant skipped.
Small-drop fees creep in quietly, so read how delivery costs affect hospitality procurement before you agree terms.
What Is Three-Way Matching?
Three-way matching is the check at the centre of any purchase to pay system. You pay an invoice only when three documents agree.
Order (what you asked for) = GRN (what you accepted) = Invoice (what you are charged)
Two-way matching compares only the order and the invoice, so it misses the short deliveries that hospitality sees every week.
Set a tolerance so your bookkeeper is not chasing pennies: accept differences under £1 per invoice, investigate anything bigger, and never accept a price per kilo above the price file.
Track how many invoices fail the match each month. It is one of the most useful procurement KPIs for multi-site groups, because it points straight to the problem supplier or site.
How Should You Handle Credit Notes?
A credit note is money the supplier owes you. If it never arrives, you have paid for goods you did not get.
Most kitchens manage credits with three habits:
- Write the short or rejected item on the delivery note or the driver’s handheld, and take a photo.
- Email the supplier that day with the delivery note number, item, quantity and value.
- Don’t pay the statement until the credit shows on it, unless the supplier agrees in writing that you can deduct it.
Check each supplier’s terms for a claims window. Some only accept shorts and damages reported within a set time, so they may refuse a credit you raise a week later.
Credit notes need a VAT check too. A credit for a standard-rated item, such as wine or cleaning chemicals, should reduce the VAT as well as the net value.
Credits are the easiest part of purchase to pay to lose on paper. The note goes missing, the chef who spoke to the rep goes on holiday, and the statement arrives showing the full amount.
Where Purchase to Pay Breaks Down in Hospitality
Textbook purchase to pay guides assume fixed prices, staffed loading bays and invoices you pay by bank transfer. Hospitality rarely works like that, so these four gaps need their own rules.
Market-Priced Fish, Meat and Veg
Fish, meat and fresh produce are often priced daily, so a fixed price file does not cover them. Ask for the day’s price in writing, by email, app or text, before you confirm the order.
Keep that message: it is the price you match the invoice against.
Early Drops With Nobody on Site
Many suppliers deliver before the kitchen opens and leave goods in a store or walk-in. Nobody checks the van, so make the delivery check the first job of the morning, before anything gets used.
Photograph anything short or damaged and report it straight away.
Suppliers Paid by Direct Debit
Direct debit removes one of the purchase to pay checks, because you cannot hold a disputed line when a supplier collects the money. Check those invoices well before the collection date and raise any dispute in writing at once, so the credit lands on the next statement.
Keg, Cask, Gas and Crate Deposits
Drinks deliveries bring a second set of numbers: kegs, casks, gas cylinders and crates that carry a deposit or container charge. Count the empties the driver takes away, make sure they appear on the delivery note or handheld, and check the credit on the next invoice.
How UK VAT and E-Invoicing Rules Affect Purchase to Pay
Purchase to pay in the UK has to fit HMRC’s invoice rules, and those rules are about to change.
A full VAT invoice must show, among other details, the supplier’s VAT number, a unique invoice number, the date and the VAT charged. Under HMRC’s VAT Notice 700, a supplier can only issue a simplified invoice when the supply is £250 or less.
So every larger delivery needs a full VAT invoice before you reclaim VAT on standard-rated lines. HMRC also expects you to keep VAT records, including invoices and credit notes, for at least 6 years.
The bigger change is e-invoicing. The government’s e-invoicing roadmap says that from 1 April 2029, VAT-registered businesses must be able to issue and receive VAT invoices as e-invoices, unless an exemption applies.
A PDF attached to an email will not count. An e-invoice is structured data that software can read, not a picture of a page.
The government plans to publish the detailed requirements between October 2027 and April 2028, and has named Peppol as the core framework for UK e-invoicing. If you choose ordering or accounts software now, ask whether it can receive Peppol e-invoices. That one question can save you a second system change in 2029.
Manual or Digital: When Should You Automate?
A paper-based purchase to pay process can work for a single café with four suppliers. It struggles once volume grows, because someone has to match every line by hand.
As a rule of thumb, move purchase to pay onto a digital system when any of these is true:
- more than eight suppliers deliver to you each week
- you receive more than 100 invoices a month
- the business runs more than one site, or plans to
- credits and statement queries take your bookkeeper more than a day a month
Digital purchase to pay keeps orders, goods-in records and invoices in one place. The match then happens automatically, and only the exceptions reach a person.
It also gives you live spend data by supplier and site for restaurant inventory management and month-end reporting.
The wider business case is in our article on how e-procurement controls rising costs.
Purchase to Pay Checklist for Your Venue
Use this list to test your current set-up. Any line you cannot tick is a leak worth fixing first.
- Agree written prices with every regular supplier, and get daily prices in writing for market-priced lines.
- Place orders in writing and set approval limits by role.
- Check substitutions against price, spec and allergen records.
- Count, weigh and probe deliveries before anyone signs, including early drops.
- Match every invoice to the order and the GRN before payment.
- Log promised credits, including drinks empties, and chase them after 7 days.
- Reconcile every supplier statement before each payment run.
- Split ordering and paying between two people.
Final Thoughts
Purchase to pay sounds like a finance term. In a restaurant or pub, though, it comes down to who checks the delivery and whether the order was written down.
Start with the step where your venue leaks most, often goods-in, price checks or credit notes. Fix that first, then add invoice matching, then the statement check before each payment run.
A steady purchase to pay routine also makes your food cost and gross profit figures more accurate.
If you want outside help, ESConnect can help you agree price files and find where spend leaks, as part of its procurement savings work.
To talk through your current process, contact the ESConnect team.
Frequently Asked Questions
1. Are purchase to pay and procure to pay the same thing?
In practice, yes: both names describe the same cycle from order to payment, and UK finance teams use them interchangeably. Source to pay is the wider term. It reaches further back to cover sourcing, tendering and contracts before the first order.
2. Is purchase to pay the same as accounts payable?
No. Accounts payable is one part of purchase to pay: recording supplier invoices and paying them. The wider cycle adds ordering and goods-in, which show whether an invoice is right before anyone pays it.
3. How is purchase to pay different from order to cash?
They are two sides of the same sale. Purchase to pay is your side, from placing the order to paying for it. Order to cash is the supplier’s side, from taking your order to collecting your money, and disputes sit where the two meet.
4. Does every delivery need its own purchase order?
No. Regular food and drink orders can run against an agreed price file without a separate PO each time, as long as you still record goods-in and match invoices. Keep formal POs for one-off, non-food and above-limit spend.
5. Who should own the P2P process in a restaurant?
The GM or owner should own it, even when others run each step. Chefs and bar managers usually order, a second person receives, the GM approves and a bookkeeper pays.
6. What happens if an invoice does not match the delivery?
Hold the lines that do not match and pay the rest on time. Ask the supplier for a credit note or a corrected invoice, quoting the delivery note number. Then confirm the credit shows on the next statement.
7. Can a small café run P2P without software?
Yes. A café with a handful of suppliers can manage with written orders, a goods-in book, a folder of price files and a monthly statement check. Software pays off once line-by-line checks get slow.
8. What can you do if a supplier will not issue a credit note?
Escalate in writing to your account manager with the delivery note number, photos and the value. If they still refuse, check whether their terms allowed the claim, record the dispute on your supplier scorecard and consider moving volume to a supplier who credits reliably.